Russia, Ukraine begin fresh round of gas talks

BRUSSELS - Agence France-Presse

Russian Energy Minister Novak arrives for an EU-Russia-Ukraine trilateral energy meeting at the EU Commission headquarters in Brussels. REUTERS Photo

Russia and Ukraine began fresh EU-brokered gas supply talks June 11, with Moscow extending a cut-off deadline to next week in the latest signs the worst East-West crisis in years may be easing.

The negotiations are being closely watched to see if they confirm recent signs that both sides want to bring some sort of closure to a crisis that began with pro-EU protests in Kiev six months ago.

If successful, the talks would build on a tentative peace push by Kiev's new president who on Tuesday ordered the creation of humanitarian corridors in the country's war-torn east, meeting a key demand of Russia.

"The Russian side has taken a step in favour of pursuing negotiations which have been going on quite intensely," Gazprom head Alexei Miller said after a meeting with EU Energy Commissioner Guenther Oettinger.

President Vladimir Putin meanwhile told German Chancellor Angela Merkel in a telephone conversation that he had ordered the Russian delegation to pursue negotiations from a "constructive position" in order to reach "a mutually acceptable agreement."

Oettinger chaired a marathon round of talks on Monday with Russian Energy Minister Aleksandr Novak and his Ukraine counterpart Yuriy Prodan but they broke up early June 10 without an accord as the Gazprom cut-off deadline loomed.

No breakthrough

With all sides agreeing that as long as the talks continued there would be no Russian cut-off, Oettinger announced another round of talks for June 11.

There would be no early breakthrough, he cautioned, with a deal likely to take days to reach. Highlighting the challenges ahead on June 10, Ukraine Prime Minister Arseniy Yatsenyuk blasted Russia for playing "games" after Moscow offered a $100 discount on the gas price.

"We know these Russian games: a discount is set by a Russian government decision and rescinded by a Russian government decision. Our position remains the same - we want a change to the contract," Yatsenyuk said. "All the traps and hooks that Russia is once again laying out for us are unacceptable," he said.

Moscow says Kiev owes it $4.5 billion in outstanding bills but Ukraine has refused to pay in protest at Russia's decision to nearly double the price in the wake of the February ouster of Kremlin-friendly president Viktor Yanukovych after months of protests.

Analysts expect the two sides to agree a price of around $350 (260 euros) per thousand cubic metres of gas, about halfway between Russia's old rate of $268.50 and the $485 set after Yanukovych's replacement by a pro-Western government in Kiev.

Gazprom said June 10 it had pushed back a supply cut-off deadline to June 16 to give the two sides more time to reach a deal. About 15 percent of Europe's gas from Russia transits through Ukraine, leaving it uncomfortably reliant on a Russia which turned the taps off in similar disputes with Kiev in 2006 and 2009.

Newly-elected pro-Western President Petro Poroshenko on June 9 ordered the creation of humanitarian corridors in eastern Ukraine to allow civilians to escape after two months of fighting against pro-Russian separatists.

Putin has pushed the idea of such corridors but Poroshenko, who made a fortune in chocolate, stopped short of accepting a request to allow Russian aid into the eastern rustbelt, fearing this would only support the rebels.

Russia said the corridor decision was "welcome" but Foreign Minister Sergei Lavrov warned at the same time that Kiev was continuing "and even intensifying" military operations in some areas.

The battles are now primarily being waged along Ukraine's border with Russia and outside Slavyansk - a city of 120,000 that was the first of a dozen to fall under rebel command in early April.