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Kyiv's Deadline Looms On $2 Billion Russian Gas Debt

Gazprom chief Aleksei Miller (left) and Ukrainian Energy Minister Juri Prodan (right) in Berlin on May 26, 2014
Gazprom chief Aleksei Miller (left) and Ukrainian Energy Minister Juri Prodan (right) in Berlin on May 26, 2014
A deadline is looming for Ukraine to pay off its natural gas debts to Russia’s state-controlled Gazprom or face a supply cut that also would impact other parts of Europe.

Ukraine has until midnight on May 29 to pay Russia $2 billion for natural gas debts under an EU-brokered agreement.

If Ukraine fails to meet the deadline, it faces the possibility that Russia will cut off its natural gas supply next week.

Gazprom chief Aleksei Miller said at a cabinet meeting in Moscow on May 28 that the restriction of gas supplies to Ukraine would go into effect at 10:00 (Moscow time) on June 3 “in the event that Ukraine does not transfer” the money.

The cuts also would mean a cut in natural gas deliveries to countries in the European Union that receive shipments through the pipeline network that transits Ukraine.

Russian President Vladimir Putin said at the May 28 cabinet meeting that the amount of unpaid gas Russia has provided to Ukraine is larger than the “entire annual supply” that Russia now sends to Poland.

Putin said: “It cannot continue indefinitely. It is simply impossible.”

Putin also said he hopes Russia “will not go as far as being compelled to resort to a prepaid system of gas deliveries.”

He said Russia would “figure out how far it is prepared to go in terms of further gas cooperation” if it starts receiving Ukrainian payments “as they have been agree upon” at European-mediated Russia-Ukrainian negotiations.

In Berlin, German Foreign Minister Frank-Walter Steinmeier told an energy conference on May 28 that the “disturbances in the supply of energy can cause damage to all sides."

He said that Russia’s energy policy and supply should “not become subjects of the larger political conflict between East and West, between Russia and Ukraine, between Russia and the EU.”

Steinmeier also said Russia has an interest – for purely economic reasons – to ensure that “the economic and energy reliability of the country does not become challenged.”
With reporting by Reuters, AP, and Rossiya-24
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