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EU, Ukraine Hold Gas Crisis Talks

Ukraine's energy minister and EU officials have met in Brussels to discuss maintaining energy supplies while at the same time cutting reliance on Russian natural gas.

EU Energy Commissioner Guenther Oettinger met with Ukrainian Energy Minister Yuriy Prodan on April 8 to review options after Russia's Gazprom said Ukraine had failed to make a payment on a $2.2 billion gas bill and threatened to suspend supplies.

Prodan said, "Under such circumstances there is a threat of interruption of gas supplies to Ukraine and subsequently there is a threat of interruption of gas transit to Europe as well."

Some 40 percent of Russian gas exports to Europe pass through Ukraine, which could mean if Ukraine is cut off, Europe would also lose gas supplies transiting Ukraine.

Prodan said Ukraine cannot pay the $2.2 billion nor can it afford to pay nearly $500 per 1,000 cubic meters of gas, the price Gazprom announced it would charge Ukraine last week.

Ukraine's Prime Minister Arseniy Yatsenyuk has said that the price Gazprom was demanding Ukraine to pay for gas was the highest in Europe.

Prodan argued that previous agreements between Kyiv and Moscow were not being honored by Russia and that the price Ukraine is being asked to pay were crippling for his country's economy.

Prodan mentioned efforts by European countries to help Ukraine with gas supplies. Prodan said officials in Slovakia had told Ukrainian officials it would be possible to reverse the gas flow and help supply Ukraine but that could create a problem with Slovakia's contract with Gazprom.

Oettinger held a separate meeting with the EU's gas coordination group, which was created after a dispute between Kyiv and Moscow in early 2009 caused a gas crisis in Europe.

Oettinger, EU officials and representatives of European gas companies reviewed storage levels in Europe, which reportedly are sufficient for the short term.

The group also discussed alternative sources of energy for Europe, especially ways to secure extra imports of LNG to offset possible reductions of Russian gas supplies.

About one-third of Europe's gas comes from Russia and despite the 2009 gas crisis, the EU has been slow to find alternative sources for gas or other energy supplies.
Based on reporting by Reuters and AFP
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