Dispute over gas supply between Russia and Ukraine continues

Ukraine continues to be troubled by its ongoing gas payment dispute with Russia, as it prepares for the upcoming winter.

Representatives from Ukraine, Russia and the European Union met in Brussels earlier this week to work out the details of an interim agreement on Russian natural gas supplies, but the meeting ended without a breakthrough.

A deal had seemed close last Friday after the two sides agreed to to a rough solution, but no agreement was formalised.

Russia cut off its gas supply to Ukraine in June of this year, after the Ukrainian government rejected the price of 544 Australian dollars per thousand cubic meters and refused to pay its bills.

Under the interim agreement, Russia could supply Ukraine with gas until March 31, while Ukraine would pay 438 dollars per thousand cubic meters in advance.

Russia has agreed to offer a discount but it refused Ukraine's proposal to incorporate the discount in the existing contract.

Ukrainian Prime Minister Arseniy Yatsenyuk has repeatedly said Ukraine could ride out the coming winter with its natural gas reserves of 17 billion cubic metres and a small amount purchased from Europe.

But Ukrainian energy expert Leonid Unigovskyi told Reuters Ukraine could not wean itself off dependence on the natural gas imported from Russia.

"Ukraine may well use its own natural gas reserves for heating during the coming winter. But the stock will run out in March next year and that will seriously threaten Ukraine's energy security."

The Ukrainian government has decided to replace natural gas with Ukraine's rich coal resources, but the measure will take some time to put into place.

Further talks to try and broker a deal will take place on October 29.


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