AFX Europe (Focus), Washington, D.C., Friday, Dec 30, 2005

WASHINGTON – The U.S. government has urged Moscow and Kiev to reach

a compromise in their dispute over the price of Russian natural gas exports, a
State Department spokesman said.

“We have been in touch with both countries to express the view that we urge
them to come to a compromise that meets the needs of both, underscoring the
importance of security of supply and stability of prices,” spokesman Adam
Ereli said.

While emphasizing that the United States sees the issue as “a bilateral
matter between Russia and Ukraine,” Ereli added that the dispute “is a
question of energy supply that we and the Europeans are all following
closely because it is significant and important.”

Talks in Moscow between senior Russian and Ukrainian negotiators ended with
no deal Thursday, but will resume Friday just hours ahead of a deadline for
cutting off supplies to Kiev, Russian news agencies reported.

Russia has threatened to cut off gas shipments to Ukraine on January 1 if
Kiev refuses to accept a quadrupling of the price.

Ukrainian President Viktor Yushchenko was quoted by Interfax news agency
late Thursday as offering a much lower price increase of only 50 to 60 pct.

Western Europe is observing the crisis nervously as around a fifth of
European gas supplies come from Russia via Ukraine and there are fears the
row could disrupt shipments. (sl/pmh/ddl/mb) -30-


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