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After Ukraine Gas Cuts, South Stream Pipeline Tops Lavrov's Belgrade Agenda

Russian Foreign Minister Sergei Lavrov was met by Serbia's Foreign Minister Ivica Dacic in Belgrade on June 16.
The future prospects of the South Stream natural gas pipeline top the agenda of Russian Foreign Minister Sergei Lavrov’s talks with Serbian officials on June 17 as he concludes a two-day visit to Belgrade.

Doubts about South Stream have risen since Bulgaria announced earlier in June that it is suspending construction of its portion of the project.

Serbian Prime Minister Aleksandar Vucic said on June 9 that Belgrade had not yet reach a decision about construction of its portion of the pipeline, which is meant to carry Russian gas to the Europe Union by a southern route that bypasses Ukraine and passes through the Balkans.

Lavrov, who flew from Belgrade following official talks in Belarus, praised Serbia for seeking "the unification of Europe and not its division."

He arrived in Belgrade on June 16 just hours after Russia's state-controlled Gazprom cut gas deliveries to Ukraine in a gas price dispute.

Russian President Vladimir Putin had threatened to cut the deliveries on June 16 unless Kyiv paid nearly $2 billion in gas debts.

Gazprom also said it has filed a lawsuit against Ukraine in a Stockholm arbitration court to recover what it says are $4.5 billion in unpaid debts.

Andriy Kobolev, the head of Ukraine's state company Naftohaz, confirmed that Russia has stopped delivering gas to Ukraine on June 16. He said Ukraine has enough reserves until December.

About 15 percent of the EU's natural gas comes from Russia by pipelines that pass through Ukraine, raising concerns in Brussels about the impact of the cuts on European supplies.

EU Energy Commissioner Gunther Oettinger, who had brokered last ditch talks between Kyiv and Moscow in a bid to avoid the cuts, said Kyiv had offered to pay $1 billion on June 16, with the remainder to be paid in installments by the end of 2014.

Russia rejected the offer.

The European Commission said in a statement that Oettinger also proposed a compromise pla that would have seen Kyiv paying a "winter" price of $385 per 1,000 cubic meters for future gas deliveries and a "summer" price of around $300.

Putin has said $385 was his final offer.

Oettinger says he is trying to arrange a fresh round of gas talks between Kyiv and Moscow later in June.

He also has urged Moscow to reconsider his compromise offer, perhaps with small adjustments.

Lavrov is due to travel from Belgrade to Baku later on June 17.

Based on reporting by Reuters, AP, Interfax and ITAR-TASS