Ukraine on Monday vowed to pay off its debts for gas pumped from Russia, dispatching a delegation to Moscow for urgent talks after threats by the Russian energy giant Gazprom to halt deliveries. Ukraine state gas company Naftogaz "will honour its debt to Gazprom", said the firm's chief Oleg Dubina in a meeting with Prime Minister Yulia Tymoshenko, the government's press service announced.
"We will go to Moscow to find ways to solve this problem. I think that these questions will be resolved," he added. Gazprom warned on Saturday it would cut off gas deliveries to Ukraine on January 1 unless a new contract is signed, in a move that would risk a repeat of 2006's interruptions to gas supplies to Europe.
The row about the debt is holding up the signing of the new contract, with Gazprom saying it cannot deliver the gas if there is no contract. Natfogaz spokesman Valentin Zemliansky said the delegation would leave late Monday or Tuesday for Moscow. Government spokesman Natalya Lysova told AFP earlier that Tymoshenko had ordered Naftogaz "to send a delegation to Russia urgently to clarify the situation about the gas debt".
Naftogaz has insisted it is not in debt to Gazprom, saying it owes around 1.26 billion dollars and only to gas trader RosUkrEnergo, an intermediary for Russia-Ukraine gas exchanges. "It is a running debt for gas consumed in September and October that is paid step by step," said Zemliansky, admitting payments have been held up by the global economic crisis. He said that the sum of 2.4 billion dollars includes an 800-million-dollar bill for November, even though the month is still ongoing, as well as penalties that are not accepted by Kiev.
Gazprom chief executive Alexei Miller has said that the price Ukraine pays for gas could increase to 400 dollars per 1,000 cubic metres from the current level of 179.5 dollars. Under an agreement reached in October between Russian Prime Minister Vladimir Putin and Tymoshenko, the countries are to move to market prices for gas by 2011.
Currently, Ukraine pays much less for Russian gas than EU countries. An earlier dispute between Russia and Ukraine over gas prices led to a brief interruption of gas supplies in several European countries in January 2006. Most of the European Union's gas imports from Russia go through Ukraine.