News.Kyiv.Me.

By Vanessa Mock 

BRUSSELS–With winter fast approaching, the European Union tried again Wednesday to press Ukraine and Russia to resolve their natural-gas dispute, extending negotiations into the night in hopes of securing a deal.

The talks under way in Brussels, the latest in a monthslong series of high-level meetings, come amid fears of possible gas shortages in parts of Europe if the flow from Russia to Ukraine is not restored.

They have been hampered, however, by mounting East-West political tensions following Kyiv’s push to sign a trade deal with Europe and the emergence of a pro-Russia rebellion in eastern Ukraine.

A deal would hinge largely on whether Kyiv is able to pay upfront for Russian supplies. Under terms tentatively agreed to Oct. 21, Ukraine would need to pay $1.6 billion in advance for November and December deliveries–money that it still needs to raise.

Kyiv said it would be able to pay $3.1 billion of its past debts to Russian gas monopoly OAO Gazprom by the end of the year.

In return, Kyiv has demanded guarantees that the terms of the deal would remain fixed and not be subject to political changes in Moscow.

Ahead of the talks Wednesday, the EU’s energy commissioner, Günther Oettinger, said a key issue was “how to leverage Ukraine to pay for new gas imports.”

“Our common ambition is to come to an interim solution, a winter package, ” he told reporters. The talks are seen as his last chance for to broker a deal before he leaves office at the end of this week.

In a sign of the difficulty, the EU scrapped a news conference planned for Wednesday evening. “We think discussions will run very late into the night,” one official said.

The Wall Street Journal reported Tuesday that the European Commission, the EU’s executive, is close to signing off on two more disbursements of loans promised to Ukraine, money that would give Kyiv some EUR760 million ($968 million) in additional funding by the end of the year.

The EU funds would go some way toward settling coming gas bills and international debt payments, two EU officials said. But it wouldn’t be enough to get natural gas flowing again from OAO Gazprom, Russia’s export monopoly.

German Chancellor Angela Merkel said last week Kyiv may need a bridge loan to help it pay Gazprom.

As he arrived for the talks, Ukraine’s energy minister, Yuri Prodan, said he was hopeful. But he also held talks with Maros Sefcovic, who will succeed Mr. Oettinger, suggesting that negotiations could continue beyond this week.

The current dispute was triggered after Russia nearly doubled Ukraine’s gas price in April following the ouster of Ukraine’s pro-Kremlin government.

Since then, Mr. Oettinger has been pushing for a deal to avoid a repeat of similar disputes in 2006 and 2009. which led to natural gas shortages in Ukraine and several EU countries.

Russian gas accounted for more than a third of the EU’s natural-gas imports last year, with around half of those supplies transiting through Ukraine.

Laurence Norman contributed to this article.

Write to Vanessa Mock at vanessa.mock@wsj.com

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(END) Dow Jones Newswires

October 29, 2014 17:19 ET (21:19 GMT)

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