EU to host Ukraine gas loan meeting on Friday
BRUSSELS, July 15 (Reuters) - The EU will host a second meeting on Friday involving itself, Ukraine, Russia and international lenders to discuss Kiev's bid for funds to buy Russian gas and ensure stable supplies to Europe, a spokesman said.
Key transit country Ukraine faces a deep economic recession, strained budgets and a weak currency, complicating its efforts to pay for Russian gas. It must also buy excess gas for winter to secure smooth transit to the 27-country European Union.
The meeting will discuss Kiev's funding request in the light of gas sector reforms proposed by Prime Minister Yulia Tymoshenko, European Commission spokesman Mark Gray said.
"The Commission and the international financial institutions have set out ... a programme of reforms for the gas sector in Ukraine that include a number of different elements both for short term and medium term," he told a briefing on Wednesday.
"Obviously we are going to look at correspondences from Prime Minister Tymoshenko ... then to see the reaction of the IFIs who have essentially set those conditions for medium-term assistance," he said.
Gray said European Commission President Jose Manuel Barroso had written to Russian Prime Minister Vladimir Putin asking him "to use his best endeavours to seek a solution to Ukraine's short-term payment difficulties".
Pricing disputes between Ukrainian state energy firm Naftogaz and Russia's Gazprom (GAZP.MM) led to a three-week stand-off in January in which gas supplies were cut to millions in Europe, and Brussels is seeking to avoid a recurrence.
Europe gets a quarter of its gas supplies from Russia and most of that goes via Ukraine. Some southern and eastern European countries are almost totally reliant on that gas.
As consumption rises everywhere in winter, Ukraine needs to keep 26-28 billion cubic metres of gas in storage to maintain pressure in pipelines to ensure smooth flows to Europe.
A banking source told Reuters last week that Russian investment bank Troika may facilitate a $4 billion loan to Ukraine from Gazprom for the gas payments. (Reporting by David Brunnstrom; Editing by Dale Hudson)
