* Kiev has until June 9 to pay for new deliveries
* Gas dispute is at heart of standoff with Kiev
* More talks could follow later this week or next week
(Changes dateline, previous Moscow, updates throughout with
By Barbara Lewis and Anna Nicolaou
BRUSSELS, June 2 Russia and Ukraine agreed on
Monday to examine a payment plan to settle Kiev's multi-billion
gas debts and fix a price for supplies until June 2015, offering
the promise of averting an energy crisis over the crucial winter
The argument over prices for natural gas has added to
tensions as the two countries have squared off over Moscow's
seizure of Ukraine's Crimea peninsula and over a pro-Russian
rebel uprising in eastern Ukraine.
Russia's Gazprom had been threatening to cut off
Ukraine's gas on Tuesday, with potential knock-on effects for
the European Union because much of the gas it receives from
Russia is pumped via Ukraine.
But the immediate threat of a supply disruption was avoided
after Kiev paid a first instalment, prompting Gazprom on Monday
to grant it a week's grace.
Since a pro-Moscow president was toppled in Ukraine in
February, Russia has demanded a sharp increase in the price
Ukraine pays for gas. Kiev says it cannot afford it and wants to
pay a discounted price that it negotiated in the past.
While the dispute has gone on, Gazprom has continued billing
Kiev at the higher rate. It says Ukraine already owes it more
than $5 billion in unpaid bills and is running up more debt at a
rate of more than $1 billion per month.
Late on Monday, after some six hours of talks brokered by
the European Commission, Energy Commissioner Guenther Oettinger
said the CEOs of Gazprom and Ukraine's Naftogaz had agreed to
consider a plan that could avoid price disputes recurring over
the European winter when demand peaks.
"My request and my expectation is that we come up with a
package that covers the period until June next year," Oettinger
He did not disclose details of the price being considered,
saying only that it was less than the $485 per 1,000 cubic
metres Russia has demanded and more than the $268.50 on which
Kiev has been insisting.
A further round of three-way talks brokered by the
Commission could be held at the end of this week or next week,
LAST MINUTE PAYMENT AVERTS CRISIS
After Kiev paid Moscow $786 million as a partial payment,
Gazprom announced a six-day extension of the deadline until June
9. Gazprom also said that it would not sue Ukraine's gas
supplier Naftogaz over unpaid bills during the coming week.
That means gas will continue to flow to Ukraine and Europe
while President Vladimir Putin and other world leaders -
including Ukraine's new president-elect Petro Poroshenko - are
in France this week for events commemorating the allied forces'
"D-Day" landings in Normandy during World War Two.
The Kremlin has not announced any plans for talks with
Poroshenko or U.S. President Barack Obama during Putin's visit
on Thursday and Friday but has said it cannot rule out the
possibility of informal meetings. They are all expected to
attend a lunch on June 6.
Putin has pulled back some of the tens of thousands of
troops he had massed on Ukraine's border and says he is prepared
to work with Poroshenko, who won a landslide presidential
election a week ago. But the past week has also seen increased
violence in eastern Ukraine.
The delicate negotiations over gas supplies provide the
economic backdrop for the crisis in Ukraine, which has led to
the biggest confrontation between the West and Russia since the
Ukraine's industry-heavy economy depends on Russian natural
gas to be competitive. Since the fall of the Soviet Union in
1991, Moscow has frequently used its control over energy
resources to influence politics.
Europe gets roughly a third of its gas needs from Russia,
and almost half of that is sent via Ukraine.
Most European countries are believed to pay Russia around
$300-$400 per 1,000 cubic metres for gas, although the prices
are not published.
The debt Moscow says Kiev already owes is equivalent to
around 3 percent of Ukraine's GDP. Delaying an agreement will
make it increasingly difficult for already cash-starved Ukraine
to meet its obligations.
Moscow's leverage is blunted because the peak winter demand
season is over and storage tanks across Europe are full. Past
pricing disputes between Moscow and Kiev in 2006 and 2009 took
place during times of peak winter demand, causing shortages and
freezing across Europe.
(Additional reporting by Katya Golubkova, Vladimir Soldatkin,
Alexei Anishchuk and Denis Pinchuk in Moscow and Henning
Gloystein in London; Editing by Timothy Heritage and David