Ukraine, Russia struggle to resolve gas dispute as winter looms

As temperatures have dropped below freezing in Ukraine and relations with Russia have come under new strains, energy officials from the two former Soviet republics were meeting in Brussels on Wednesday for a last-ditch attempt to negotiate a resumption of Russian natural gas deliveries for the winter.

Ukrainian Energy Minister Yuri Prodan and his Russian counterpart Alexander Novak met in the Belgian capital amid low expectations that the talks brokered by European Union Energy Commissioner Gunther Oettinger would move the adversaries from their standoff over Ukraine's debts for previous gas supplies and Russia's threat to cut deliveries to Europe as well.

Ukraine owes Gazprom $5.3 billion for supplies that were cut off in April following months of nonpayment, according to the Russian energy behemoth.

The calculation of Ukraine's debt is one of the issues frustrating an agreement. Moscow offered Kiev a 30% discount on gas imports late last year as an inducement to then-Ukrainian President Viktor Yanukovich to keep the country's economy closely tethered to Russia's instead of signing an association agreement with the European Union.

That deal was scuttled after a pro-Europe rebellion ousted Yanukovich in February. An angry Kremlin then seized Ukraine's Crimean peninsula, home to Russia's Black Sea fleet and other defense installations, and canceled another gas rate cut for Kiev that had been part of the leasing agreement for the Kremlin's Crimean bases.

European Union-mediated talks have secured agreement from Moscow to sell gas to Ukraine at $385 per 1,000 cubic meters. That is a compromise between the heavily discounted rate in place when Yanukovich was in power and the price demanded after relations between the countries soured earlier this year with the Crimean annexation and Moscow support for separatist militants in eastern Ukraine.

The negotiators entered Wednesday's talks in Brussels under new clouds of contention as fighting resumed between Ukrainian government forces and the Russian-backed militants occupying major industrial sites in eastern Ukraine. More than 3,700 people have been killed in the conflict that has cleaved the Donetsk and Luhansk regions from the Kiev government's control.

Russian Foreign Minister Sergei Lavrov on Tuesday angered Ukrainian leaders and their Western allies by saying that Moscow would recognize separatist elections planned for Sunday in areas of eastern Ukraine controlled by the militants.

The leaders of the self-proclaimed independent republics of Donetsk and Luhansk blocked voters from taking part in Ukrainian parliamentary elections this past Sunday, contending the territory they hold is no longer part of Ukraine.

In an interview with Germany's ZDF television, EU mediator Oettinger gave the gas talks a 50-50 chance of success in producing an agreement. The New York-based Eurasia Group consulting firm put the likelihood of failure at 60%.

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Ukraine, Russia struggle to resolve gas dispute as winter looms

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