Countdown to summer campaign for Russia – Ukraine gas dispute

Just a few months after Ukraine and Russia signed a deal on gas payments, a new threat looms. With a deadline for payment days away, Russian leaders are warning of what could be round the corner.

Ukraine owes $500 million for gas delivered in May. It has until the 7th of June to pay for it. Ukraine's energy company Naftogaz Ukraine says it will meet the deadline.

If it fails, the theat of another winter gas crisis could hang over Europe. Gas deliveries from Russia to Ukraine are made under long-term contracts with the price set for the year.

President Medvedev believes that in the wake of a series of gas disputes which have involved supplies to downstream users in Europe, it is time for a pan European solution.

“We must be guided by one simple thing, this problem is not a problem of Russia and Ukraine alone. It is a problem involving gas shipments to third countries – to European countries.”

Ukraine, which is widely seen as being on the verge of default, has asked for a loan of over $4 billion to buy 19.5 billion cubic meters of gas.

But Russia, which has had to manage repeated late payments in the past, and which has already prepaid gas transit fees through Ukraine to February 2010, can only allow its generosity to go so far. Prime Minister Putin is warning that if there is any further delays in payment, it will be time for up front payments from then on.

“According to the contract, with the first disruption in payments, Gazprom has the right to pre-payment. If there’s no pre-payment there will be no gas. Only the paid-for gas will be delivered to Ukraine”

Talks between Russia and Ukraine over payments for Russian gas deliveries have traditionally been a New Years problem. If Kiev doesn't find the money by this weekend, Europe could be feeling the chill of winter several months too early.