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New Efforts To Break Russia-Ukraine Gas Deadlock

Talks on problems with gas supplies for European Union countries in Moscow on January 14
MOSCOW/KYIV (Reuters) -- European energy firms are working on a plan to break the deadlock between Russia and Ukraine and restore natural-gas supplies to Europe in mid-winter.

Paolo Scaroni, chief executive of Italian energy giant Eni said late on January 15 that a consortium would provide gas necessary for technical reasons to get pipelines and pumping stations working again.

The move could allow gas supplies to Europe to get under way immediately, leaving the question of reimbursement for the consortium's gas on hold until an agreement between Ukraine and Russia on their price dispute is reached.

Scaroni said the consortium would include E.ON, Gaz de France Suez, and an Austrian company.

Eni is Europe's leading gas operator and largest user of the Ukraine pipeline. Scaroni, who said the involvement of the firms would begin on January 16, discussed the consortium idea with Russian Prime Minister Vladimir Putin on January 15.

Putin and Ukrainian Prime Minister Yulia Tymoshenko plan to meet in Moscow on January 17 to try to resolve the gas row, which has cut supplies to 18 states in the depths of winter, forcing many factories to close and leaving householders shivering.

There was little enthusiasm in Brussels for a separate Moscow meeting with importers proposed by Russian President Dmitry Medvedev. But the EU executive said it and the Czechs -- holders of the rotating EU Presidency -- would attend if Russian and Ukrainian leaders were there too.

Senior East European officials will hold talks in Kyiv on January 16 on the disruption in gas supplies, the office of Ukrainian President Viktor Yushchenko said.

Frustration is growing in the EU at the failure of Russia and its former Soviet vassal Ukraine to resolve the row over how much Kyiv should pay Moscow for gas, or at least allow gas to flow to Europe while they argue it out.

"It is clear today, even if they turn on the taps tonight and gas starts to flow, there has been irreparable, irreversible damage done, a loss of confidence in both Russia and Ukraine," said Martin Riman, the Czech industry and trade minister.

An EU-brokered deal was supposed to get supplies of Russian gas moving to Europe via Ukraine on January 13 despite the pricing dispute. EU monitors are in place to ensure Ukraine does not siphon off gas, as Moscow has alleged it has done.