The Canadian Press - ONLINE EDITION

EU, Ukraine and Russia are to hold gas price talks this month to assure smooth deliveries

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WARSAW, Poland - The European Union said Friday it will hold gas price talks this month with Russia and Ukraine in an effort to avoid any disruption of deliveries.

EU energy commissioner Guenther Oettinger said after a meeting between the three sides in Warsaw that common ground must be found in Russia's dispute with Ukraine. After Kyiv signed a co-operation pact with the EU instead of with Russia, Moscow annexed the Crimean Peninsula and is accused by the EU and U.S. of fomenting unrest in Ukraine's eastern region.

Moscow also hiked the price of gas for Ukraine to $485 per thousand cubic meters from $268.50, and threatened to limit deliveries if Kyiv does not respect that new price and repay a debt of $3.5 billion.

Oettinger met with Ukraine's and Russia's energy ministers, Yuri Prodan and Alexander Novak.

Novak said that because Ukraine did not pay for gas deliveries in March and April, Russia's state-owned gas monopoly, Gazprom, will demand prepayment for June deliveries to be made by end May. If the prepayment is not made, it will limit supplies to the levels contracted only by other European countries that receive their supplies through Ukraine.

Ukraine will take the price issue to a European arbitration court this month, Prodan said.

The sides agreed to hold trilateral talks to be held in mid-May and at the end of May. They will seek to stabilize the situation enough to allow Ukraine to store gas in May, June and July in preparation for winter, Oettinger said.

The 28-country EU will mediate with the aim of establishing a just gas price, he said.

In the middle of winter of 2009, Gazprom cut gas deliveries to Ukraine in a gas price dispute.

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