* Gas a key part of relations between Russia, Ukraine and EU
* Tuesday deadline passed, talks to continue on Wednesday
* Russia offers to scrap gas exports duty
(Updates with delayed start of talks, changes dateline to
By Barbara Lewis and Anna Nicolaou
BRUSSELS, June 10 Russia and Ukraine will resume
efforts to resolve a gas pricing dispute on Wednesday after a
Russian deadline for Kiev to pay some of its debts passed
without Moscow cutting off supplies.
The gas dispute is at the heart of a crisis between Russia
and Ukraine, and failing to resolve it would set back peace
moves that are gaining momentum after weeks of violence in
Russia had given Ukraine until 0600 GMT on Tuesday to pay
some of the billions of dollars it owes, but pulled back from
the deadline after officials said talks brokered by the European
Commission would continue.
Eight hours of negotiations in Brussels, which ended around
3 a.m. (0100 GMT) on Tuesday, failed to overcome differences
The plan was to resume talks late on Tuesday, but the
Commission said that had been pushed back to 9:30 a.m. on
Wednesday because the Russian delegation had flown back to
Moscow to consult President Vladimir Putin and their return
flight to Brussels had been delayed.
After annexing Crimea in March following the overthrow of
Ukraine's Moscow-leaning president, and facing unpredictable
events in eastern Ukraine, Putin has reason to reduce tensions.
Ukraine last week paid off a chunk of its debt, but talks
have stalled on the gas price, threatening possible supply
disruptions to the European Union, which gets about a third of
its gas imports from Russia, almost half of it via Ukraine.
A source at Gazprom said Russia was supplying Ukraine with
the usual volumes of gas.
"Ukraine has been taking 112-115 million cubic metres a day,
at a peak, as it pumps gas into storage facilities. Transit to
Europe remains stable, at 200 million cubic metres per day," the
Talks between Russia, Ukraine and the European Commission
have been going on while Kiev, Moscow and the Organization for
Security and Cooperation in Europe discuss peace proposals put
forward by Ukraine's new president, Petro Poroshenko.
Those talks have produced what Kiev says is a mutual
understanding on key aspects of the peace plan, intended to end
an insurrection by separatist rebels who want parts of
Russian-speaking eastern Ukraine to join with Russia.
DISAGREEMENT ON PRICE MECHANISM
The talks that ended early on Tuesday faltered over the
price Moscow would charge Kiev in future.
Ukraine wants to change the 2009 contract that locked it
into buying a set volume of gas, whether it needs it or not, at
$485 per 1,000 cubic metres - the highest price paid by any
customer in Europe.
Moscow dropped the price to $268.50 after Ukraine's
then-President Viktor Yanukovich turned his back on a trade and
association agreement with the European Union last year, but
reinstated the original price after he was ousted in February.
Speaking after Tuesday's talks, Ukrainian Energy Minister
Yuri Prodan said he objected to a Russian price mechanism
proposal, which would link lower prices to an export duty.
Russia has floated the idea of scrapping its export duty for
gas exports to Ukraine - $100 per 1,000 cubic metres, introduced
after Moscow annexed Crimea - to reduce the price.
Russian Energy Minister Alexander Novak said on Tuesday he
had proposed "a very constructive plan, which we believe all
stakeholders could and should accept".
Moscow has said Ukraine must pay some of its debt before it
can talk about price. Kiev paid off $786 million of its debts in
late May and Russian officials have suggested it could pay $1.45
billion to cover gas it received last November and December, and
a further $500 million as a part of a bill for April and May
(Additional reporting by Vladimir Soldatkin and Denis Pinchuk
in Moscow and Pavel Polityuk in Kiev; Editing by Elizabeth Piper
and Robin Pomeroy)