Tags: EU | Russia | Ukraine | Gas

Cash-Strapped Ukraine Struggles to Keep Russia Gas Supplies

Friday, 27 Feb 2015 06:30 AM

Cash-strapped Ukraine sought to buy time in its effort to ensure continued gas supplies from Russia, making a $15 million payment to Moscow on Friday as it waits for international rescue loans to arrive.

But Moscow says the sum will cover only an additional day, leaving a potential cut-off looming Tuesday.

That increases pressure on Ukraine to strike a deal at an upcoming meeting with Russian officials in Brussels on Monday, amid rising fears in Europe that energy supplies could be threatened by a shutdown to Ukraine.

But with Ukraine's economy on the brink of collapse and money from a 15.5 billion euro ($17.5) bailout deal from the International Monetary Fund that has not yet made it to Ukrainian coffers, it is unclear how capable — or how willing — Kiev is to strike a long-term deal with Moscow.

Andrei Kobolev, an executive with Ukrainian state gas company Naftogaz, said the $15 million sum was sent Friday as an advance payment. Russian supplier Gazprom said it would only buy another day at the current rate of supply.

Following a bruising dispute over prices and debt that raised fears of supply disruptions in Europe, Russia and Ukraine signed a deal in October requiring Kiev to pay in advance for gas shipments.

President Vladimir Putin and other government officials warned earlier this week that Russia would cut off supplies to Ukraine by the end of the month barring further pre-payments.

Another roadblock to a deal could be deliveries to Ukraine's war-torn east, where fighting between Kiev's forces and Russia-backed rebels has left nearly 5,800 people dead since April.

A fresh dispute erupted last week after Ukraine cut gas supplies to areas controlled by the rebels, prompting Russia to pump gas directly to the area. Russia said the deliveries should be counted as a part of the overall volume of its gas exports to Ukraine, but Kiev protested, saying it could not manage distribution in areas outside its control.

Putin on Wednesday angrily denounced Ukraine's decision to halt gas supplies to eastern regions, home to 4.5 million people, saying it "smacks of genocide."

"If the Ukrainian authorities consider it part of their territory, they should be fully responsible for the situation there," he said. "And if it's not so, they should openly say that."

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Europe
Cash-strapped Ukraine sought to buy time in its effort to ensure continued gas supplies from Russia, making a $15 million payment to Moscow on Friday as it waits for international rescue loans to arrive.
EU, Russia, Ukraine, Gas
379
2015-30-27
Friday, 27 Feb 2015 06:30 AM
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