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Russia, EU Probe Ways To End Gas Dispute Ahead Of Winter

Russia and the European Union on September 11 discussed ways of ending Russia's gas dispute with Ukraine to allow for the resumption of gas supplies this winter.

Russian gas giant Gazprom in July halted all natural gas supplies to Ukraine after a breakdown of talks between Moscow and Kyiv over pricing.

Moscow claimed that Brussels is now ready to provide $500 million for Ukraine to resume gas purchases.

"It seems to us that we were able to reach an agreement on the so-called winter package" from October 1 to March 31, Russian energy minister Alexander Novak said after meeting in Vienna with the European Commission's vice-president for energy Maros Sefcovic.

Novak said that the fate of the agreement now depended on Ukraine. "If they agree it, we could meet next week" for another round of talks, and the gas could start to flow again, he said.

The European Commission said the meeting "created a solid basis for convening a trilateral meeting with Russia and Ukraine, and to finalize a new package in the near future."

Ukraine transports 15 percent of the gas consumed by Europe, and its own reserves are running low two months after Gazprom turned off the tap.

Novak said that Moscow, which has refused to fix gas prices for more than a quarter, was ready for a "price discount for the winter period to set the price at the level of neighboring countries like Poland."

The Russian side also claimed that the EU was offering to provide $500 million to Ukraine specifically for purchasing gas from Gazprom.

Gazprom chief Alexei Miller said that amount of money would buy about two billion cubic meters of gas, which Ukraine could inject into its badly depleted underground gas storage facilities, which must be maintained to keep pressure in the system so the gas flows through to Europe.

"The question of financing is the crucial one to ensure an uninterrupted transit through the territory of Ukraine in autumn and
winter," he said. But he added that even with the money, Ukraine will not be able to raise its storage levels to 19 cubic meters as needed to ensure supplies through the winter.

Miller warned that the upcoming winter could be unusually cold. "Abnormally cold winters happen once in ten years and we all remember the cold winter of 2005-06," he said.

Andriy Kobolev, the chief of Ukraine's gas operator Naftogaz, confirmed that Kyiv plans to "get money mostly from the Europeans in the form of loans as well as other sources."

Russia and Ukraine usually engage in end-of-year haggling over energy prices, but ties collapsed altogether after a popular uprising in Kyiv ousted Kremlin-backed leader Viktor Yanukovych last year, a move which prompted Moscow to hike its gas prices and stop the flow of gas.

With reporting by AFP and TASS
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