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Russia, Ukraine gas talks falter; ‘mutual understanding’ on eastern violence reached

AP

Marathon talks between Ukraine and Russia to resolve a bitter gas dispute broke up overnight without a deal, EU Energy Commissioner Guenther Oettinger said, and are set to resume later Tuesday or Wednesday.

“All points of the deal were negotiated, and discussions will resume,” Oettinger said after seven hours of talks.

Officials from Ukraine and Russia were meeting in Brussels in an eleventh-hour effort, brokered by the EU, to avert a cutoff of gas supplies from Moscow to Kiev.

The third gas war in less than a decade began after the ouster of Russia-backed president Viktor Yanukovych in February and Ukraine’s decision to seek closer economic ties with the EU.

Russia hiked Ukraine’s gas price by 81 percent to $485.50 per 1,000 cubic meters — the highest in Europe, and demanded a payment of $5.17 billion for debts and deliveries through June.

Ukraine branded the demands a form of “economic aggression” and threatened to take Russia to international arbitration if the gas were cut off.

The dispute is worrying to Europe, which depends on Russia for about a third of the natural gas it consumes, and roughly half of Russian imports flow through Ukraine.

The talks are under the auspices of EU Energy Commissioner Guenther Oettinger and include the energy ministers from Russia and Ukraine as well as the CEOs of Russia’s Gazprom and its Ukraine counterpart, Naftogaz.

Last week Gazprom pushed the deadline back a week to June 9.

Before the start of the fifth round of negotiations Monday, analysts had widely expected a deal, as pressure for a compromise was great on all sides.

The price for future deliveries was predicted to be agreed at around $360 per 1000 cubic meters of gas — a sum about halfway between Russia’s old price and the one set after the conflict erupted.

An unnamed Ukrainian official also said he expected Kiev’s Naftogaz was prepared to make an immediate payment of $1 billion for gas it received in the last two months of last year.

As officials negotiated gas prices, a separate energy dispute flared up between the EU and Russia over the Kremlin-backed South Stream pipeline project.

Moscow on Monday accused the European Union of putting pressure on Bulgaria to suspend work on the key gas pipeline.

The South Stream project is one of Russia’s most valued projects, intended to allow gas deliveries to bypass Ukraine as a transit country to Europe.

“Sometimes Brussels is guided by a desire to punish, a desire to take revenge,” Foreign Minister Sergey Lavrov said, though the EU says the suspension is purely for procedural concerns.

Elsewhere on Monday, Ukraine said it had reached a “mutual understanding” with Moscow on parts of a plan proposed by President Petro Poroshenko for ending violence in the east of the country.

Kiev gave no details and Russia did not comment directly but two days of talks, following a brief encounter in France last week that broke the ice between Poroshenko and Russian President Vladimir Putin, have given momentum to peace moves.

German Foreign Minister Frank-Walter Steinmeier said in a statement released in Berlin that there was “some faint light at the end of the tunnel” in the Ukraine conflict for the first time in months.

The Ukrainian Foreign Ministry said in a brief statement in Kiev that Russian and Ukrainian representatives had met three times in the past two days to discuss Poroshenko’s plan to end an insurrection by pro-Russian separatists in the east.

“As a result of the work, the sides reached a mutual understanding on key stages of the implementation of the plan and on a list of priorities which will contribute to a de-escalation of the situation in the Donetsk and Luhansk regions of Ukraine,” it said.

The talks are being mediated by the Organization for Security and Co-operation in Europe, the Vienna-based security and human rights watchdog, but almost no details of Poroshenko’s plan or the talks have been made public.

It was not even clear who took part in Monday’s meetings, although the Ukrainian leader was present at Sunday’s talks and said that the violence must end this week.

“Each day when people die, when Ukraine pays such a high price, is inadmissible for me,” his office quoted him as saying.

Poroshenko, who was sworn in on Saturday, has called for daily meetings of the “contact group” and the Foreign Ministry said the talks would continue.

Scores of people have been killed since April in east Ukraine, including separatists and government forces, and Russian speakers there are suspicious of Poroshenko and the new, pro-Western government in Kiev.