EU recognizes Kiev’s gas debt, promises help to repay – official

MOSCOW, May 5 (PRIME) -- Brussels has no doubt that Ukraine has a debt for gas supplied by Russia and it is willing to help Kiev to repay it, E.U. Energy Commissioner Gunther Oettinger said May 2 at the trilateral negotiations between Russia, Ukraine and the E.U. in Warsaw.

"Ukraine isn't paying in accordance with gas contracts, there is no doubt in it," Oettinger said, adding that "payment of outstanding Ukraine's bills is high in the European Commission's aid package."

Russia, Ukraine, and the E.U. have failed to reach an agreement on all gas-related issues during the talks, Oettinger said. The parties will hold the next round of negotiations in mid-May.

Russian gas giant Gazprom will switch to advanced payments for Ukraine in June, and the bill will be sent to Kiev on May 16 if Ukraine does not start to repay the U.S. $3.492 billion debt by then, Russian Energy Minister Alexander Novak said.

Until the end of May, Gazprom and Ukrainian companies Naftogaz Ukrainy and Ukrtransgaz will ensure uninterrupted gas transit to Europe, Oettinger said.

Kiev has not announced its debt repayment plans so far despite receiving the first tranche of the International Monetary Fund’s aid, amounting to U.S. $3.2 billion, Novak said. According to Novak, after May, the E.U. may face troubles in receiving Russian gas because Naftogaz Ukrainy has not agreed to store enough gas in its underground storages to provide for uninterrupted supplies.

At the further negotiations, Ukraine will try to reduce the price to $268 per 1,000 billion cubic meters from almost $500, Energy and Coal Industry Minister Yury Prodan said. “If we do not reach an agreement at the trilateral consultations, we will have nothing than beginning court litigations left. We will meet in courts on May 28,” he said.

Prodan confirmed Kiev’s earlier plans to avoid gas debt repayment until the price is reduced.

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