MOSCOW/KIEV, Dec 31 (Reuters) - Ukrainian Prime Minister Yulia Tymoshenko prepared to fly to Moscow on Wednesday for a last-ditch attempt to head off a threatened Russian gas cut-off that could disrupt supplies to Europe.
Russia has said it will turn off the taps to Ukraine on Jan. 1 if it does not receive $2 billion in arrears and conclude a new supply deal, a threat that has alarmed European states which receive their Russian gas via pipelines passing through Ukraine.
Ukraine said on Tuesday it had paid the debt in full but Russian gas export monopoly Gazprom said it had not received the cash. Disputes also remained over the price Kiev will pay for its gas supplies next year.
There were signs that a trip to Moscow was being readied by Tymoshenko’s staff, though there was no immediate confirmation from officials in Kiev or the Russian government.
Russia’s Interfax news agency quoted an official at Ukraine’s embassy in Moscow as saying the visit would take place, and Ukrainian journalists belonging to a pool which covers Tymoshenko’s meetings were summoned to the airport in Kiev, one of them told Reuters.
But a source close to the Ukrainian government said: “No one knows for certain whether the visit will take place.”
It was not clear if Tymoshenko was preparing to go to Moscow because a deal was imminent, or if she was flying in because her officials, locked in talks with Gazprom executives for days, had failed to make any progress.
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European states, which receive a quarter of their gas from Russia — mainly via pipelines running across Ukrainian territory — are watching the row closely and have called on both sides to reach a compromise.
They want to avoid a repeat of problems they experienced in January 2006 when a similar row between Kiev and Moscow caused brief disruption to Russian gas deliveries to Europe.
Russia denies any political motive behind the row but relations between the two-ex Soviet neighbours have been fraught since pro-Western leaders came to power in Kiev in 2004 and started to push for membership of the NATO alliance.
Waging their fourth gas row in as many year, Kiev and Moscow have been trading accusations daily.
Gazprom says it is owed over $2 million in arrears for gas deliveries, a sum disputed by Ukraine, while Kiev says the price Russia is asking for gas in 2009 is too high.
The head of Gazprom’s export arm plans to hold a news conference at 1100 GMT on Wednesday.
In previous disputes, Russia accused Ukraine of illegally siphoning off gas destined for European customers to meet domestic demand, an allegation that Kiev denied.
This year Ukraine says it has sufficient gas reserves to ride out the dispute, but it has warned that the fall in pressure in the pipeline system caused by a Gazprom cut-off could have a knock-on effect on deliveries to Europe.
The dispute is being played out as the economies of both Russia and Ukraine grapple with the effects of the global financial crisis.
Many analysts have said that Ukraine, struggling with a mounting financial crisis that has not been resolved by an International Monetary Fund loan, will struggle to pay the debt.
If Tymoshenko is able to avert a gas cut-off, it would give her a boost in her rivalry with Ukrainian President Viktor Yushchenko. Officials in Moscow have indicated they prefer to deal with Tymoshenko than Yushchenko. (Reporting by Natalya Zinets in Kiev and Oleg Shchedrov and Maria Kiselyova in Moscow; Editing by William Hardy)
