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Russia is offering Ukraine a more flexible payment schedule for overdue natural-gas supplies to resolve a dispute that threatens to disrupt supplies to Europe as the heating season looms.

Russia may cut its demand for the first debt payment to $1.45 billion from $2 billion, Energy Minister Alexander Novak told reporters today in Moscow. Ukraine must settle this amount and pay an advance before Russia will resume deliveries to the transit nation, he said.

We officially sent that proposal on Oct. 3 to the EU, Novak said. Ukraine hasnt accepted it yet.

The European Union, which depends on Russian gas piped across Ukraine for about 15 percent of its needs, has been seeking to broker an interim deal between the two countries to avoid a repeat of supply cuts in early 2006 and 2009. Russian gas exporter OAO Gazprom halted deliveries to Ukraine over a pricing and debt dispute in June, as political tensions rose over a separatist conflict in the smaller nation.

Ukraine has so far failed to approve proposals the EU made at three-way talks in September, which would oblige it to pay $3.1 billion of gas debt to Russia by the end of this year. In return, Russia would decrease its price through March by $100 to $385 per 1,000 cubic meters, for at least 5 billion cubic meters of the fuel.

The government in Moscow is sticking to its demand for payment of $3.1 billion this year, while Ukraine is seeking to spread the remainder -- after $1.45 billion for November and December of 2013 -- in equal installments through March, Novak said.

Ukraine told the EU it would need 4 billion cubic meters of Russian gas for the heating season under the interim agreement, Novak said. The country lacks 5 billion cubic meters of gas to get through the winter, Ukrainian Energy Minister Yuri Prodan told reporters in Kiev today.

Novak, Prodan and EU Energy Commissioner Guenther Oettinger plan to resume talks on the interim agreement Oct. 21.

I cannot say that we will be able to reach a final decision, Prodan said today. But anything is possible.

The government in Kiev is ready to consider the proposals from Russia, Interfax reported today, citing Ukrainian Deputy Prime Minister Volodymyr Hroisman.

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Russia Eases Gas Payment Demands for Ukraine Before Talks