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Energy

Russia’s Gazprom extends deadline for Ukraine gas payments

Ukraine’s deadline to pay for Russian natural gas deliveries has been extended after a Tuesday morning payment deadline for outstanding bills expired. The Gazprom CEO says the move is intended to give talks more time.

Ukraine now has until 0800 UTC on June 16 to pay the billions of US dollars it owes to Gazprom, the Russian state-owned gas firm announced Wednesday.

After that deadline, Russian gas would only flow to Ukraine in exchange for prepayment, Gazprom Chief Executive Alexei Miller said.

"The Russian side has taken a step in favor of pursuing negotiations which have been going on quite intensely recently and has decided that the switch to the pre-payment system will be postponed until Monday," Miller said in televised comments following a meeting with EU Energy Commissioner Günther Oettinger.

Oettinger is mediating the talks between the energy ministers of both Russia and Ukraine.

Ukraine, Russia and the EU are set to resume trilateral talks Wednesday after marathon negotiations between Moscow's Energy Minister Aleksandr Novak and his Kyiv counterpart Yuriy Prodan broke up early on Tuesday.

A Kremlin statement released overnight said Russian President Vladimir Putin told German Chancellor Angela Merkel in a telephone conversation that he has ordered the Russian delegation to pursue negotiations from a "constructive position" in order to reach "a mutually acceptable agreement."

A Tuesday morning deadline for Kyiv to pay back some of the debt it owes Russia for gas passed without Moscow shutting off supplies, due to the further talks being scheduled.

The gas dispute between Russia and Ukraine

The conflict over gas pricing is intrinsically linked to the ongoing crisis in Ukraine. Kyiv wants to change the contract which locked it into buying a set volume of gas at $485 (about 360 euros) per 1,000 cubic meters, the highest price paid by anyone in Europe.

Moscow slashed the price by almost half when Ukraine's then-president, Viktor Yanukovych, ditched a trade and association agreement with the EU last November. But after Yanukovych was ousted in February following months of protests against his governance, Moscow raised the price.

Russia has also said Ukraine must pay some of its hefty gas debt, which Moscow says totals about $5.2 billion, before prices can be talked about. Kyiv paid off $786 million of its debts in early June.

The European Union has an interest in resolving the dispute. Russia supplies about a third of the EU's gas, with about half of that reaching the bloc through pipelines across Ukraine.

uhe/hc (AFP, dpa, Reuters)

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