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EU energy chief says 'good chance' of Russia-Ukraine gas deal

The EU Energy Commissioner says Moscow and Kyiv have a "good chance" of reaching a resolution to their gas dispute. The proposed deal would see Ukraine pay $2.5 billion to Russian energy giant Gazprom.

European Energy Commissioner Günther Oettinger said that after meeting with the Russian and Ukrainian energy ministers in Berlin on Monday, the two sides still had to consult with their respective political leaders and gas companies involved - but that he was optimistic the dispute could be solved.

"We made relatively good progress and have a good chance of reaching an agreement by June 1," Oettinger said.

Under the the proposed deal,


would pay around $2.5 billion (1.8 billion euros) to Gazprom - about half the amount Russia says its owned in back payments and for the month of June - over the coming days and weeks.

Oettinger said aid from the UE and International Monetary Fund would help Ukraine pay its debt, and the goal was to ensure "security of supply" and to "avoid disruptions".

"We make it possible, but the decision will be made in Kyiv," he said.

Gas standoff

The tense gas standoff between Russia and Ukraine has seen Gazprom hike its prices and threaten to suspend deliveries if Kyiv doesn't pay its bill for June, worth around $1.66 billion. Russia says Ukraine's total gas debt is $3.5 billion and has said it will only deliver gas if Ukraine pays in advance.

Ukraine's energy minister, Yuri Prodan, expressed less optimism than Oettinger, but didn't rule out a deal being reached.

"So far there is not yet a decision taken, and I also assume that from the Russian party no decision has been taken yet," he said. "It was a suggestion by the European Commission to be discussed."

European concern

Ukraine has said it could start paying off its gas debt if Moscow restores the gas price discounts that were cancelled, following the ouster of pro-Russian President Viktor Yanukovych earlier this year.

The Russia-Ukraine dispute has also

raised concern

over gas flows to the European Union. The bloc imports a quarter of its gas from Russia, nearly half of which runs through Ukraine.

Earlier on Monday, German Chancellor Angela Merkel said "it is important that the energy talks make progress."

"I hope an agreement can be reached this week," she said. "That is very important."

Monday's gas meeting came as

Ukrainian forces launched an airstrike

on pro-Russian separatists who seized an airport in the eastern city of Donetsk, a day after billionaire Petro Poroshenko won elections to become Ukraine's next president.

dr/jr (AP, AFP)

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