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Ukraine, Russia Return To Negotiating Table Over Gas Row

Gazprom is watching (AFP) Ukrainian gas officials have returned to the negotiating table with their Russian counterparts in Moscow in a bid to avert a gas cutoff.

In the latest gas dispute between the two neighboring states, Russia's state-owned gas monopoly, Gazprom, is threatening to shut down supplies to Ukraine over what it says are $1.5 billion in payment arrears by its state energy firm, Naftohaz.

Gazprom has issued an ultimatum for Ukraine to settle its debt. "If this situation is not settled in the coming days, [by February 18], Gazprom will discontinue this assistance and Russian gas deliveries to Ukraine will be suspended," spokesman Sergei Kupriyanov said.

Russian First Deputy Prime Minister Sergei Ivanov, speaking last week after an international security conference in Munich, Germany, said his country was not willing to "engage in billions of dollars in charity anymore."

Naftohaz has denied wrongdoing. Ukrainian First Deputy Prime Minister Oleksandr Turchynov, however, has admitted that Naftohaz owes money to Russia.

The dispute bears echoes of a similar gas-payment dispute in January 2006, following which Russia briefly shut down deliveries to Ukraine, disrupting supplies to parts of Europe. Ivanov sought to soothe European jitters over the latest dispute, pledging to keep Russian gas flowing for consumers other than Ukraine.

The row comes on the eve of Ukrainian President Viktor Yushchenko's visit to Moscow. The rare meeting between Ukraine's pro-Western leader and his Russian counterpart, Vladimir Putin, on February 12 was planned to focus on strategic issues, but Gazprom's threat to cut gas supplies is now certain to top the agenda.

Yushchenko faces sticky talks -- not only due to the souring ties between Kyiv the Kremlin, but also to his growing differences with Ukraine's Prime Minister Yulia Tymoshenko.

Tymoshenko, who is herself scheduled to visit Moscow on February 21, is campaigning for the removal of intermediary companies in the gas-supply system, which she says are responsible for rising prices. First Deputy Prime Minister Turchynov promised that Naftohaz would settle its debt on condition that future gas contracts are signed directly with Gazprom.

But Yushchenko has voiced caution about reconsidering the current deal, pointing out that despite the hike in Russian gas prices this year Ukraine still pays less than most neighboring countries -- $180 per 1,000 cubic meters. The market rate for gas imported to Europe is about $230 per 1,000 cubic meters.

(with agency reports)

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