Russia and Ukraine Fail to Reach Gas Deal as Deadline Looms

June 16, 2014

Russia and Ukraine failed to resolve a gas pricing dispute at talks and a 10 a.m. deadline for Ukraine to pay $1.95 billion in gas debts still stands, a spokesman for Russian natural gas producer Gazprom said Monday.

Russian natural gas producer Gazprom said it was not extending the deadline for Ukraine to start paying off its gas debts after the discussions ended in the early hours of the morning in Kiev, raising the prospect of disruptions to gas flows to the EU via Ukraine.

The breakdown of the talks is likely to increase political tensions that have mounted in the past few days between Kiev and Moscow as Ukrainian government forces clashed heavily with pro-Russian separatists in east Ukraine.

The latest in several rounds of talks ended at around 1:30 a.m. (22:30 GMT) despite a last-minute attempt by the EU's energy commission to secure a compromise.

Moscow says Ukraine has a total of more than $4 billion in gas debts and wants almost half that sum paid by 06:00 GMT.

"The Russian side is expecting payment of the accumulated gas debt of $1.951 billion before 10 a.m. (0600 GMT) on June 16," Gazprom spokesman Sergei Kupriyanov said.

"If the funds are not paid, gas supplies will, as was announced earlier, be switched to a pre-payment system."

Copyright, The Moscow Times, 2014.