Russia, Ukraine gas dispute irks EU

Dec. 29, 2005 at 11:27 AM
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MOSCOW, Dec. 29 (UPI) -- Russian and Ukrainian officials negotiated Thursday over the timing and extent of a hike in Kiev's bill for Russian natural gas imports.

The Kremlin has demanded that beginning in 2006 Ukraine pay four times as much for natural gas as it did in 2005, bringing Ukraine's bill in line with that of western European nations.

Ukraine has refused to accept an abrupt price hike and threatened to siphon 15 percent of the natural gas flowing through Russia's Druzhba pipeline, which exports natural gas to Europe, if Russia insists on quadrupling the price of gas, Novosti reported.

In Brussels, EU officials -- worried that the dispute may escalate to the point where Ukraine limits Europe's gas supplies -- publicly expressed hope that the price dispute would be quickly resolved.

Privately, though, EU officials warned that they would appeal "powerful pressure" on Kiev to come to an agreement with Russia.

Meanwhile, Russia's president offered Ukraine $3.6 billion to cover expenses on the move to market prices for natural gas. He said such a loan could be guaranteed by a European bank.

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