"In July this will become a real problem: Ukraine will have no money to pay for gas for storage. (The summit) is the last opportunity to give guidance to the European Commission on what to do," a top politician from an EU member state told German news agency dpa.

However, Ukrainian state gas player Naftogaz moved to allay EU fears today, saying European gas companies could buy and store Russian gas on Ukraine's territory in a move that could help avoid a new gas crisis.

Russia has repeatedly warned Europe could face new supply disruptions if Ukraine fails to find the money to pump Russian gas into its underground storage to ensure smooth supplies this winter.

Ukraine's Prime Minister Yulia Tymoshenko said this week the country needs $4 billion in credits to buy Russian gas for storage and hopes to raise the funds through European banks.

Naftogas said in a statement released this afternoon the required sum was even bigger - $4.2 billion - but the heavy borrowing could be avoided if European companies agreed to buy more gas than they currently need and store it in Ukraine.

In January, a dispute over payment between Ukraine and Russia saw the country's gas monopoly Gazprom cut gas supplies to the former Soviet state, choking supplies to a swathe of EU states in central and eastern Europe

Last week, the Czech government, which currently holds the EU's rotating presidency, and the commission, the EU's executive, sent a team of experts to Russia and Ukraine on a fact-finding mission.

The move was prompted by fears that Ukraine might be unable to pay Gazprom for gas which it would store during the summer and then sell on to EU customers in the winter.

Commission chief Jose Manuel Barroso will brief EU leaders on the report at the summit, commission energy spokesman Ferran Tarradellas told dpa.

But ahead of the summit, top officials said that the experts had concluded that Ukraine would be unable to pay for EU-bound gas in July - with serious effects for the EU's consumers.

"Of course it's an issue again. It's not very clear what the reasons are, whether it's just that the Ukrainian government has no money or whether it is some kind of new strategy from (Russian) prime minister (Vladimir) Putin," Lithuanian Prime Minister Andrius Kubilius told the news agency.

However, the summit was unlikely to propose concrete solutions, Kubilius said.

"The EU has no such funds to step in. Perhaps European gas infrastructure companies will have to have some kind of arrangement, but that is up to the companies," he said.

Separately, experts on the gas industry from EU member states met officials from the Ukrainian and Russian gas monopolies today in Brussels to debate the same issue.

"Due to rising concerns on a possible disruption of Russian gas supplies to Europe through Ukraine, the commission decided to invite (the two sides) to explain what the situation is," Tarradellas said.

EU experts will assess the replies after the meeting, he said.

Published: 18 June 2009 12:50 GMT  | Last updated: 18 June 2009 13:38 GMT