Prepay Before Pumping: Russia Threatens Gas Delivery to Western Europe

European Union energy commissioner Guenther Oettinger addresses a news conference as part of a meeting of the European Union, Russia's energy minister Alexander Novak and Ukraine's energy minister Yuri Prodan about Ukrainian future gas supply in Berlin, Friday, May 30, 2014. (AP Photo/Markus Schreiber)BRUSSELS (AP) — Russia on Monday granted Ukraine another week before it will start demanding prepayment for gas, without which it has threatened to cut off supplies.

The announcement by Russia's state gas company Gazprom came at the outset of a second round of European Union-mediated talks aimed at resolving the two countries' dispute over gas prices and outstanding debt.

The negotiations in Brussels will be chaired by EU Energy Commissioner Guenther Oettinger and feature both countries' energy ministers.

Officials are seeking to avoid an interruption of gas deliveries to Ukraine, which could also disrupt supplies for western Europe because Ukraine is an important gas transit country.

Gazprom extended its initial deadline for requiring gas prepayment from Tuesday to next Monday after receiving a payment of $786 million from Ukrainian gas company Naftogaz for the February and March supplies, the Russian company's Chief Executive Alexei Miller said. A decision on whether to charge Ukraine for gas in advance will now depend on whether Kiev pays its dues for April and May supplies, he added.

Moscow has put Kiev's gas debts dating back to November at $3.5 billion, and Miller said last week that gas delivered in May could take it up to $5.2 billion.

Ukraine, which saw price discounts granted by Russia canceled following the ouster of pro-Russian President Viktor Yanukovych, has been seeking a new price agreement before settling debts.

Gazprom scrapped a discount granted to Yanukovych in December and then another rebate linked to a 2010 deal on Russian navy presence in Ukraine's Crimea region, which Moscow annexed in March. Canceling the discounts raised the price by 80 percent.

Yanukovych fled to Russia in February after months of protests, triggered by his decision to dump a pact with the EU in favor of closer ties with Moscow.


Nataliya Vasilyeva in Moscow contributed reporting.

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