October 24, 2014 / 4:21 PM / in 5 years

UPDATE 1-Putin urges West to help Ukraine with funds for Russian gas

* Gas talks to be held next week in Brussels

* No deal due to lack of funds in Ukraine, prepayments clams (writes through, adds quotes)

By Alexei Anishchuk

LAURA, Russia, Oct 24 (Reuters) - Russian President Vladimir Putin issued a plea to the European Union and United States on Friday, asking them to help cash-strapped Ukraine raise funds to pay for Russian gas purchases and warning about escalation of the gas crisis.

He also said he hoped a deal would be reached next week with Ukraine to end a long-running dispute in which Moscow has halted natural gas supplies to Kiev, part of the row at the heart of deepest East-West rift since the Cold War.

The Russian and Ukrainian energy ministers are expected to hold more talks with the European Commission in Brussels next week on the dispute over Ukraine’s unpaid bills and the price Kiev pays for its gas.

One issue at the talks - which have dragged on since June, when Russian stopped gas flows to Ukraine due to unpaid bills - was Ukraine’s inability to raise enough financing during a conflict with pro-Russian separatists in the east of the country.

Putin said that Ukraine owed Russia $4.5 billion for gas supplies in the end of 2013 and in 2014. Ukraine has said it set aside $3.1 billion to cover Russian gas purchases, which is not enough to make a prepayment and redeem part of the debt.

“We took upon ourselves a huge responsibility and risks. We think that it is absolutely fair that these risks be shared with us by the European or American partners,” Putin told an informal group of experts on Russia that includes many Western specialists critical of him.

“Let them give $1.5 billion, at least for a month,” he said, adding that he personally asked Russian gas exporter Gazprom not to claim the $4.5 billion outstanding debt at once.

He urged the European Union and the International Monetary Fund to give Ukraine a bridge loan to settle the gas dispute with Russia before Kiev gets a $3 billion tranche from the IMF in January.

“Help Ukraine, give it a bridge loan for a month,” Putin said, adding that so far he has got a negative response.


Russia has been insisting that Ukraine pay for the gas in advance, a condition which has irked Kiev. Putin said Gazprom will insist on prepaymets.

“If we do it (ditch prepayment claim), they surely won’t pay us.”

He also said that Moscow will not make upfront payments to Kiev for Russian gas in transit to the European Union, where Gazprom provides a third of the gas consumed. Half of Russian gas supplies flows via Ukraine.

Putin reiterated that Ukraine may start siphoning off Russian gas destined for Europe if the gas issues are not resolved. (Reporting by Alexei Anishchuk and Lidia Kelly, writing by Vladimir Soldatkin, Editing by Timothy Heritage, Larry King)

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