Ukraine making 1st gas payment to Russia

BERLIN -- Ukraine said Friday that it ordered a $786 million payment to Russia in a first step toward paying off its gas debts, and another round of talks aimed at resolving the two countries' dispute over gas prices and preventing a possible supply cutoff was set for Monday.

Russia has stepped up pressure on Ukraine over gas lately, calling for Kiev to pay its debts and saying it wants payment up front for deliveries starting in June. It has threatened to restrict supplies starting Tuesday if no payment is made.

Moscow has put Kiev's gas debts dating back to November at $3.5 billion, and the CEO of Russian gas company Gazprom said this week that gas delivered in May could bring them to $5.2 billion. Ukraine, which saw gas price discounts granted by Russia canceled following the ouster of pro-Russian President Viktor Yanukovych, has sought an agreement on prices before paying up.

Ukraine's gas company, Naftogaz, announced at a European Union-mediated meeting in Berlin Friday with Gazprom and the Russian and Ukrainian energy ministers that it has transferred $786 million to Gazprom, EU Energy Commissioner Guenther Oettinger said. That covers deliveries in February and March, a period for which the price charged to Ukraine is undisputed, Ukrainian Energy Minister Yuri Prodan said.

Russia's representatives declared themselves ready to resume talks on Ukraine's outstanding gas debts and its future gas price in Brussels on Monday afternoon, provided that the bank transfer arrives in Gazprom's account Monday as expected, Oettinger said.

"Our ambition is to aim for an agreement on Monday," ahead of the supply deadline Russia has set, Oettinger said.

"We have got very little time left for new discussions, but we are very constructively minded and we hope that our partners are equally constructively minded," Russian Energy Minister Alexander Novak told reporters.

Yanukovych fled to Russia in February after months of protests, triggered by his decision to dump a pact with the EU in favor of closer ties with Moscow.

Gazprom scrapped a discount granted to Yanukovych in December and then another rebate linked to a 2010 deal on Russian navy presence in Ukraine's Crimea region, which Moscow annexed in March. Canceling the discounts raised the price by 80 percent.

Ukraine's Prodan declined to say what price might emerge from negotiations, but said it should be market-oriented and fair.