Edging towards a deal

European Energy Commissioner Günther Oettinger emerged from the negotiations held in Brussels on Monday to announce that the heads of Russia's Gazprom and Ukraine's Naftogaz had agreed to consider an EU-proposed plan to resolve the dispute.

Oettinger said the proposal foresaw Ukraine paying a lower price than Russia is currently charging it for gas, while at the same time setting out a repayment schedule for Kyiv to pay of millions of dollars in debt for supplies it has already taken delivery of.

The Commissioner declined to divulge what the proposed price was, beyond saying that it was lower than the $485 (357 euros) that Russia currently charges Ukraine per 1,000 cubic meters and higher than the discounted $268 it once charged Kyiv.

Oettinger said the two CEOs had asked for time to evaluate the legal, financial and economic aspects of the proposal, in consultation with their respective governments.

He added that he hoped the deal could be wrapped up in further talks in the next few days and that the two sides had agreed that there would be no interruption to supplies while the proposal was under consideration.

"My request and my expectation is that we (will) come up with a package that covers the period until June next year," Oettinger said.

First installment received

Earlier on Monday, Russia confirmed that it had received a Ukrainian payment of $786.4 million dollars, a first installment on what Moscow says is the $5.2 billion owed to it by Kyiv.

Russia had threatened to cut of the flow of gas to Kyiv on Tuesday if no payment had been received.

The latest gas dispute between Moscow and Kyiv began after Ukraine's pro-Kremlin President Viktor Yanukovych was toppled and fled to Russia back in February. Moscow responded by imposing a sharp increase on the price of gas it charges Ukraine.

The European Union is keen to help resolve the dispute, as Ukraine is a key transit country for Russian gas imports to the EU.

pfd/rc (AP, dpa, Reuters)