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Gas talks in Berlin

Chris CottrellMay 29, 2014

The latest round of gas talks between Russia and Ukraine in Berlin ended inconclusive. But Kiev has paid some of its debt and negotiations will continue this week to avert a gas shutdown to the crisis-hit country.

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Ukraine Gaspipeline Archiv 2013
Image: Reuters

The third meeting between Russian and Ukrainian energy delegates to come up with a solution to a protracted feud over energy prices - which could see gas to Ukraine cut off completely - ended without a breakthrough last week.

"We don't have a final deal yet but we have made progress," EU Energy Commissioner Guenther Oettinger said after mediating between Russian Energy Minister Alexander Novak and his Ukrainian counterpart Yuriy Prodan, as well as both countries' energy companies, in Berlin.

Ukraine's gas company, Naftogaz, announced that it has transferred an initial payment of $786 million to Russian gas firm Gazprom, Oettinger said, adding that the talks would continue in Brussels next week.

Tensions were already high following two failed rounds of negotiation. On Friday the Russian energy minister, Alexander Novak, told journalists that Kiev had failed to pay $2 billion by Thursday in order to guarantee June gas supplies.

The Russian energy giant Gazprom has said Ukraine will have run up a tab of $5.2 billion by June 7 and has demanded billions of euros in back and advance payments.

Ukraine already has the highest energy costs in Europe after Russia jacked up the price by 81 percent to $485.50 per 1,000 cubic meters.

Ahead of the talks, Europe's Energy Commissioner Günther Oettinger called the price Moscow was demanding "unacceptable," saying it was political and not determined by the market.

Oettinger, who has been mediating the talks, said Friday that Ukraine must make a down-payment to Russia – and that Moscow should offer a fair price for future gas supplies in return.

Earlier this week Oettinger laid out his suggestions for defusing the conflict, proposing that Kiev pay Russia $2 billion by Thursday this week - a deadline they already missed - and a further $500 million by June 7. In the meantime the two adversaries were supposed to discuss lowering costs for the future.

Russia has demanded Ukraine pay $5.17 billion by next Monday for outstanding debts and June supplies. Ukraine said it wants assurances that gas will be cheaper in the future before it clears its arrears and sends money for next month's shipments.

cjc/dpc (AFP, Reuters, AP, dpa)