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EU offers Ukraine to pay Russia $3.1bn to cover debt

Staff writer |
The European Union has proposed that Ukraine pay Russia $3.1 billion to cover its debt to Russia's gas giant Gazprom, European Energy Commissioner Gunther Oettinger said.

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"We are talking about Ukraine committing to pay all of its open invoices, which amount to $2 billion, with the payments required to be made no later than the end of October. The payments must be made to the account of Russian partners and the Commission will get relevant guarantees from the International Monetary Fund (IMF)," Oettinger said following trilateral gas talks in Berlin.

The energy commissioner added that Ukraine will also submit an additional payment of $1.1 billion to its Russian partners before the end of the year. Thus, Gazprom will receive a total of $3.1 billion from Ukraine by the end of 2014.

In June, Moscow introduced a prepayment system of gas deliveries to Ukraine due to Kiev's gas debt, estimated at $5.3 billion.

Russian Prime Minister Dmitry Medvedev stressed that Russia would only agree to a temporary price of $385 per cubic meter of gas for the period of negotiations between Russia's Gazprom and Ukraine's Naftogaz companies, and would resume cooperation on the issue only after the debt is paid.

Ukraine is not only a consumer, but also a transit country for Russian gas. Around half of Russian gas exported in 2013 crossed Ukraine, which amounts to approximately 15 percent of European consumption, according to the International Energy Agency. EU has repeatedly stressed an importance of trilateral talks on the issue in order to come to an agreement before winter comes.

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