* Ukraine and Russia disagree over gas price
* Talks complicated by political tensions
* Russia wants Kiev to start paying off debts
(Adds comments after talks start)
By Natalia Zinets
KIEV, June 15 Ukraine and Russia made a
last-ditch attempt to reach a deal in a gas pricing dispute on
Sunday, hours before a deadline for Kiev to pay a $1.95 billion
debt or have its gas supplies cut off.
Sources close to the talks in Kiev said no breakthrough was
made in the initial stages of the talks on Sunday evening but
the sides continued talking after a pause.
Russia and Ukraine disagree how much Kiev should pay for the
natural gas it receives from Russia and Russian state-owned
natural gas producer Gazprom plans to switch to an
advance payment system if Kiev does not start paying its bills.
The deadline is 0600 GMT on Monday, after which Russia has
threatened to halt supplies to Ukraine.
This could disrupt the gas flow to the European Union, which
gets some of its imports via Ukraine, but prospects of a
breakthrough have been hit by political tensions and clashes
between government forces and pro-Russian separatists in east
The talks, which are being mediated by the European
Commission, had been expected to resume on Sunday morning
following a meeting on Saturday, but were delayed. The reason
was not immediately clear.
A source close to one of the delegations said there had been
a break in the discussions, by which time no "results" had been
achieved. Another source close to the talks said there had been
"nothing so far."
Ukraine has accepted a European Commission compromise
proposal of $326 per 1,000 cubic metres of gas for an interim
period. Moscow has offered Kiev a $100 reduction to $385, around
the average amount paid by Russia's European clients.
Resolving the dispute and averting supply cuts could help
ease tension over the separatist rising in east Ukraine, which
Kiev blames on Moscow despite Russian denials that it is arming
Tensions are also high following Russia's annexation of
Crimea after Ukraine's Moscow-leaning president was ousted and
pro-Western leaders took over power.
(Editing by Timothy Heritage)