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Published: Wednesday August 20, 2014 MYT 1:25:02 AM
Updated: Wednesday August 20, 2014 MYT 1:26:07 AM

Ukraine says ready for short-term compromise on Russian gas price

KIEV (Reuters) - Ukraine's energy minister on Tuesday said the country was prepared to pay an interim compromise price for Russian gas and criticised Russia's Gazprom for being unwilling to negotiate.

Last year, Russia supplied about half of the gas Ukraine used, but Gazprom cut supplies on June 16 in a row over pricing and after Moscow's annexation of Crimea.

Ukraine, which is sourcing more gas from the European Union and cutting consumption from last year's 50 billion cubic metres (bcm), is prepared to compromise on the price until a lawsuit it has filed against Gazprom is resolved, minister Yuri Prodan said.

"We are ready to talk about some kind of reasonable compromise price until the situation is resolved (by the court)...but Gazprom is not taking part in the negotiation process," Prodan told reporters. "There is no compromise yet from Gazprom's side."

In June, Ukrainian state gas company Naftogaz filed a lawsuit at the Stockholm arbitration court to establish a "fair and market price" for natural gas supplies from Gazprom.

The case is still in its preliminary stages and it is not known when a final ruling will be reached.

Prodan said around 16 billion cubic metres (bcm) of reverse flows from Poland, Hungary and Slovakia would cover over 50 percent of Ukraine's gas import needs this year.

However Ukraine needs to find another 5 bcm in imports for October-March, he said. "We're getting ready for a difficult winter."

Gazprom declined to comment. In April the company voiced doubts over the legality of reversed gas flows from the West to substitute for Russian supplies.

In June, the head of Ukraine's state gas company said Kiev was ready to pay a compromise price of $326 per 1,000 cubic metres of Russian natural gas for an interim 18-month period to allow time to end the pricing dispute with Moscow.

On Tuesday, Prodan did not say what compromise price Ukraine is now willing to consider from Gazprom.

(Reporting by Natalia Zinets; Additional reporting by Vladimir Soldatkin; Writing by Alessandra Prentice, editing by William Hardy)

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