No Deal in RussiaUkraine Gas Talks as Kiev Digs In on Price

No Deal in Russia-Ukraine Gas Talks as Kiev Digs In on Price

EU-brokered talks with Russia and Ukraine finished Wednesday without an accord as Kiev dug in over how to fix a gas price that it said would depend too much on Moscow's tenuous goodwill.

BRUSSELS -- EU-brokered talks with Russia and Ukraine finished Wednesday without an accord as Kiev dug in over how to fix a gas price that it said would depend too much on Moscow's tenuous goodwill.

The latest round, which began on a more positive note after Russian giant Gazprom (IW 1000/16) extended to Monday a threatened gas cut-off, broke up with all three parties explaining their positions separately, highlighting continued deep differences.

EU Energy Commissioner Guenther Oettinger said that in his opinion the talks had established some common ground on price, delivery volumes and duration into 2015.

"We should use our remaining days [to Monday] to our advantage," Oettinger said, adding that all parties, including at heads of state, would remain in contact in an effort to reach an accord.

"We are still in negotiations," he said. "I can see movement on both sides, and both sides will need to continue to move."

However, Ukraine Energy Minister Yuriy Prodan said Kiev could not accept an offer of $385 per 1,000 cubic meters, as it depends on a Russian discount of $100 that could easily be withdrawn if Moscow changes its mind.

Market Price vs. Politics

Ukraine wanted a price set by the market laid down in a commercial contract, Prodan said, but "unfortunately Russia proposed a way of fixing the price which I would call political."

"We cannot accept this price mechanism," he said, adding that Ukraine would continue to make "appropriate payments" to cover outstanding bills and new deliveries.

Russian Energy Minister Alexander Novak said Gazprom had made an important gesture in giving the talks extra time until Monday to reach an agreement, failing which the company would then demand pre-payment for gas.

"We are now waiting for action from Ukraine," Novak said.

Russia had also laid out a payment schedule to cover Ukraine's outstanding bills and future payments, Novak said, and this was "sufficient for an accord that would allow us to continue supplying gas."

As the talks wound up in Brussels, Russian President Vladimir Putin warned Ukraine against refusing the $385 price being offered.

Ukraine was driving negotiations into a "dead end," Putin said. "If our offer is rejected, then we will shift to a whole other level. That is not our choice, and we do not want that."

Copyright Agence France-Presse, 2014

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