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Kremlin awaits Ukrainian gas decision

Russian prime minister says issue could hurt the economy.
By Daniel J. Graeber Follow @dan_graeber Contact the Author   |   May 29, 2014 at 8:36 AM
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MOSCOW, May 29 (UPI) -- An agreement on gas debt between Ukraine and Russian energy company Gazprom may be finalized by the end of the week, a negotiator said Thursday.

Russian Energy Minister Alexander Novak met this week with European Energy Commissioner Gunther Oettinger and Ukrainian Energy Minister Yuri Prodan to discuss ongoing debt issues.

A proposal brokered during this week's meetings calls on Ukrainian energy company Naftogaz to pay $2 billion by Friday and another $500 million by June 7 to settle its outstanding debts.

A source close to the negotiations told Russia's state-run news agency RIA Novosti a deal is expected before the week's end.

"There will be no official information [about Ukraine's decision] today," the source said on condition of anonymity. "Possibly, [the announcement will be made] after a meeting on Friday."

The state news agency says Naftogaz owes about $4 billion to Gazprom, a figure disputed by the Ukrainian side.

Russia meets about a quarter of European gas needs, though most of that runs through the Soviet-era pipeline network in Ukraine.

Russian Prime Minister Dmitry Medvedev said Thursday ongoing tensions with Ukraine could harm the Russian economy.

"The next few years will be marked by continued instability and strained environment in some markets," he said.

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