* EU will support Ukraine economically - Oettinger
* Ukraine prepared to pay if Russia lowers its gas price
* Oettinger calls for uniform European gas pricing from
* Concerns about gas transit to Europe in winter
(Releads, adds Russian, Ukrainian, EC quotes)
By Dmitry Zhdannikov and Jakub Iglewski
WARSAW, May 2 Russia on Friday threatened to cut
natural gas supplies to Ukraine in June if it receives no
prepayment in an escalating row between Moscow, Ukraine and the
European Union over energy supplies.
Relations between Russia and the West have fallen to their
lowest ebb since the Cold War following Moscow's annexation of
Ukraine's Crimea region and the outbreak of clashes involving
pro-Russia militia in the east of the country.
"If we don't receive pre-payment for June by May 31, then it
is possible Gazprom will reduce gas supplies to Ukraine or
provide it with the capacity it has paid for by May 31,"
Russia's Energy Minister Alexander Novak said during joint talks
in Warsaw between Russia, Ukraine and European Commission.
He also warned that Ukraine might not be able to store
enough gas during the summer for transit to European countries
in the winter.
A third of the EU's gas demand is met by Russia, with almost
half of that passing through Ukraine, which is currently in a
pricing dispute with Russian gas exporter Gazprom, its
third in the past decade.
Gazprom says Kiev owes it some $3.5 billion for gas already
Friday's gas talks were held after Russian President
Vladimir Putin called on the EU to intervene to avert a repeat
of gas cuts prompted by the two previous pricing disputes.
Coming out in support of Ukraine, EU Energy Commissioner
Guenther Oettinger told the gas meeting that the EU would
support Ukrainian gas firm Naftogaz economically, adding he
hoped there would be no gas stoppages.
"Stakeholders promised that there will be no stoppages in
gas deliveries and despite ongoing legal issues, gas will be
delivered to the EU and Ukraine by end-May," Oettinger told a
press briefing. The three sides will meet again in mid-May and
at the end of the month.
Ukraine Energy Minister Yuri Prodan said Kiev was willing to
pay a fair market price for gas.
The country enjoyed a brief price discount offered under
former pro-Russia Ukrainian President Viktor Yanukovich earlier
this year but Gazprom hiked the price in April following his
"Ukraine, having received from Russia an unjustified,
discriminatory price for gas from April 1, 2014, at nearly $500
per 1000 cubic metres (up from under $300), will not be able to
pay for gas deliveries at this price," said Ukraine's energy
DIVIDE AND RULE
Gas prices are also an issue between Russia and the EU, and
Oettinger said EU member states should reject Moscow's "divide
and rule" tactics on pricing.
"The game of 'divide et impera' (divide and rule), or a game
of this type proposed by Moscow, cannot be and will not be
accepted by EU member states," Oettinger said, referring to the
varying prices Russia charges across Europe.
He called for a unified EU gas price from Russia, reflecting
tougher talk on energy in Europe in the wake of the Ukrainian
"We want a uniform gas price in the European common market,"
Oettinger said at the joint news conference with Polish Prime
Minister Donald Tusk.
Tusk has also promoted the idea of an EU energy union and
joint purchases of Russian gas.
Currently, EU member states buy Russian gas under bilateral
contracts with Moscow while joint purchases would improve EU's
negotiating power and likely lower prices.
"We have very big differences in terms of gas prices. The
higher the share of Russian gas in purchases and the bigger the
monopoly Russia has in supplies, the higher the prices are,"
Gazprom said his pricing proposal raised contractual
questions. "We would like to know if the proposal is to unify
the price for all suppliers of gas to Europe, not only Russia,"
said spokesman Sergei Kupriyanov.
Gazprom boss Alexei Miller was attended the talks on Friday
when asked about idea told Reuters: "What I'm most concerned
about is that Ukraine said today it is unable to guarantee
stable transit to Europe this winter."
Prodan said Ukraine was ready to guarantee smooth transit
and he hoped an ongoing arbitration in Stockholm over what
Ukraine sees as artificially high prices may lead to the
realisation that in fact Ukraine owes Gazprom no money.
Price disputes between Moscow and Kiev prompted Gazprom to
switch off supplies in 2006 and again in 2009, causing winter
heating and cooking gas shortages in Ukraine and several states
which receive gas via the country.
The EU has since made some progress in diversifying its
energy mix yet its reliance on Russian oil, gas and coal has
continued to rise, with Europe paying Moscow $250 billion in
annual energy bills.
Oettinger also said Europe should have pan-European grids
for natural gas and electricity, including more power links
"The infrastructure with regard to gas and energy transit
should have a pan-European character and should also include
Ukraine, Georgia and Western Balkans," Oettinger said. "We want
to prove our solidarity with Ukraine."
(Writing by Marcin Goclowski and Henning Gloystein; editing by
Marcin Goettig and Jason Neely)