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Russia-Ukraine gas talks deadlocked

Gas talks between Ukraine's state-run Naftogaz Ukrainy and Russian gas giant Gazprom ended with no concrete results, Naftogaz boss Oleh Dubyna said.

Interfax-Ukraine quoted Dubyna as saying the talks in Moscow with Gazprom chief Alexei Miller ended without result but that they would be continued.

Dubyna was also quoted as saying that Naftogaz is still in negotiations with Gazprom.

"We are in negotiations," Dubyna told the European Parliament.

"I can see just purely economic gaps between Naftogaz and Gazprom," Reuters quoted him as saying.

Interfax-Ukraine said Dubyna claimed three-way talks in Brussels, involving the European Union, had been cancelled at the behest of the Russian side.

Miller and Dubyna were expected to meet in Brussels when they hold talks with European Energy Commission Andris Piebalgs and Czech Trade & Industry Minister Martin Riman, representing the Czech EU presidency.

It emerged that European Commission officials were holding separate talks with representatives of Gazprom and Naftogaz in a bid to to broker a compromise in their gas dispute.

But it remained unclear whether the European Union's executive arm would convince the two sides to sit at one table in Brussels, Commission spokesman Johannes Laitenberger told a daily news briefing.

"(European Commission President Jose Manuel) Barroso has met the Russian delegation and will meet the Ukrainian delegation," he said. "I am not in a position to say who will meet with whom and when."

Separately, the European Parliament's foreign affairs committee was holding a meeting with senior Gazprom and Naftogaz officials to let them explain why their gas dispute has cut supplies to Europe.

Gazprom fully suspended supplies of transit gas towards Ukraine yesterday, saying there was no longer any point delivering the gas because Kiev had shut down the pipelines.

Ukraine - whose pro-Western leaders have clashed with the Kremlin over their drive to join Nato - said Russia was deliberately starving Europe of gas. Russia cut off gas for Ukraine's domestic consumption on New Year's Day.

The row over gas prices and debts owed by Ukraine to Russia cut heating to tens of thousands of households in Bulgaria and hit supplies as far west as France and Germany as Europe faced freezing mid-winter temperatures.

In Bulgaria, one of the worst affected countries, at least 45,000 households were without central heating yesterday. Schools were shut and some companies were closed. Temperatures in Sofia fell to minus 14 degrees Celsius overnight.

Against a backdrop of mounting pressure from European countries on both Kiev and Moscow to get gas flowing again, Russian President Dmitry Medvedev spoke by telephone late last night with Ukrainian President Viktor Yushchenko.

Medvedev told his Ukrainian counterpart gas supplies had become hostage to squabbling in the Kiev leadership and that Moscow would only resume pumping gas for Ukraine's own use if Kiev agreed to pay a market price for the fuel.

Gazprom said it was increasing supplies to the EU and Turkey via other routes. Despite those measures, the dispute cut Russia's supplies to Europe - which depends on Moscow for a quarter of its gas supplies - by half.

The reduction in supplies has been sharper and more prolonged than a similar disruption in January 2006.

The euro zone's major economies have escaped significant economic repercussions, but France has reported a drop in supplies and an Italian industry ministry spokesman said Italy has begun tapping its stockpiles of natural gas.

A total of 18 countries were experiencing supply disruptions. Most were drawing on alternative sources or using stockpiled gas, but with the row in its eighth day and a cold snap pushing up demand, those reserves were dwindling.

Eastern and Central Europe have borne the brunt of the row. Bulgaria cut back or suspended supplies to industrial users and Slovakia declared a state of emergency after a complete halt in supplies from Russia.

Today Czech and Slovak energy companies said supplies from Russia through Ukraine were still at a standstill.

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