* Gas talks postponed between Putin and Yanukovich
* Ukraine wants to pay lower price for Russian gas
* Analysts see little chance of real gas war
* Putin likely to talk pipelines in Brussels on Friday
By Alexei Anishchuk and Pavel Polityuk
MOSCOW/KIEV, Dec 18 Ukraine's president pulled
out of gas price talks with Russian leader Vladimir Putin at the
last minute on Tuesday, raising concern about the reliability of
supplies to Europe before a Russia-EU summit.
The postponement revived memories of disputes between the
two countries that led to reductions in the supply of Russian
gas to Europe through Ukraine's pipeline network in 2006 and
Viktor Yanukovich, whose country is a transit route for
Russian gas, had been due to meet the Russian president in
Moscow to try to secure a reduction in Ukraine's fuel bill.
But Kremlin foreign policy aide Yury Ushakov said Yanukovich
had postponed the talks because more time was needed to prepare
documents they had planned to sign.
"Yanukovich had planned to visit today and it has been
decided to delay this visit," Ushakov said. "It is necessary to
conduct additional expert work to complete all the documents
which we had initially planned to sign."
Putin is due to meet European Union (EU) leaders in Brussels
on Friday, and energy is likely to be high on the agenda, but a
repeat of what have become known as the "New Year gas wars" is
Cuts to European gas supply transiting Ukraine during
earlier disputes exacted a cost for both countries, prompting
Europe to step up an energy-security agenda, including reduction
of transit risk and diversification of supply away from Russia.
Russia's gas export monopoly Gazprom, an important
contributor to the Russian state budget, depends on European
exports for the majority of its revenues, while Ukraine depends
on transit fees from Russia to fill its state coffers.
"I do not expect a new gas war. There might be some kind of
information warfare," Ukrainian political analyst Volodymyr
"The visit has been postponed because they apparently failed
to agree but I do not think this will lead to escalated tension.
If we (Ukraine) stick to the current agreements, and we will,
there should be no escalation."
While in Brussels, Putin will portray Russia as a reliable
supplier and present his country's case against EU open-market
measures which, Moscow says, discourage investment in
infrastructure that helps secure flows of gas to Europe.
Questions about compliance with equal-access rules hang over
the South Stream pipeline project in particular. South Stream is
to bring gas directly from Russia via the Black Sea floor to
southeastern Europe, bypassing Ukraine's transit network.
Ukraine, for its part, stands to lose transit revenues if
South Stream goes ahead and could benefit from a standoff
between Russia and the EU over the pipeline's compliance with
"Ukraine has been complaining to the EU about Russia and its
plans to build South Stream," Valery Nesterov, an analyst with
Sberbank investment research, said.
"Ukraine wants the EU to pour cold water on South Stream. I
think there is no threat to Russian gas flows to Europe. It's
hard to imagine that Gazprom would become an instigator of such
an event. It's not in Gazprom's best interests. And it is in
Ukraine's interests to present itself as a safe transit
Kiev is struggling to afford its fuel bill to Russia under
the current terms, which stem from a 2009 agreement over which
Ukraine's former prime minister, Yulia Tymoshenko, was jailed on
charges of abuse of office.
Kiev says the price of $430 per 1,000 cubic metres it is
paying this quarter is too high but has balked at demands for
big concessions to Moscow to achieve a reduction.
These could include joining a customs union with Russia,
Ukraine and Belarus.
Ushakov said Yanukovich would not attend a meeting this week
of the customs union. Ukraine has observer status but is not a
"The meeting will be conducted without observers," Ushakov
Yanukovich's office said more time was required to define
the relationship between Ukraine, a member of the World Trade
Organization, and the customs union. Sources have suggested a
gas deal might not involve full membership of the customs union
"On the agenda of the meeting between the presidents of
Russia and Ukraine were the issues of bilateral cooperation,
above all in the energy and trade areas - in particular, working
out a mutually acceptable way for Ukraine to interact with the
Customs Union of Russia, Belarus and Kazakhstan," Yanukovich's
office said in a statement.