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Sunday, 15 June 2014 | MYT 6:50 PM

Ukraine expects gas talks with Russia as deadline looms

KIEV (Reuters) - Ukraine said it expected to resume talks with Russia on a gas pricing dispute on Sunday evening, with a deadline looming for Kiev to pay a $1.95 billion debt by Monday or have its gas supplies cut off.

Halting Russian deliveries to Kiev could disrupt the gas flow to the EU, which gets some of its imports via Ukraine, but prospects for a breakthrough have been hit by clashes between government forces and pro-Russian separatists in east Ukraine.

Ukraine's energy minister had said after talks in Kiev on Saturday that discussions would continue on Sunday morning, but no meeting took place.

Ukraine's Energy Ministry later said it hoped the talks, being mediated by the European Union's energy commissioner, would resume in Kiev on Sunday evening and Ukrainian state gas company Naftogaz said it expected talks at 8 p.m. (1800 BST).

Russian officials did not immediately confirm this.

Ukrainian and Russian officials failed to end the long-running dispute at talks in Kiev on Saturday but Ukrainian Energy Minister Yuri Prodan said after leaving the meeting that the discussions would continue on Sunday.

Russia and Ukraine disagree how much Kiev should pay for the natural gas it receives from Russia and Russian state-owned natural gas producer Gazprom plans to switch to an advance payment system if Kiev does not start paying its bills.

Ukraine has accepted a European Commission compromise proposal of $326 (192.15 pounds) per 1,000 cubic metres of gas for an interim period. Moscow has offered Kiev a $100 reduction to $385, around the average amount paid by Russia's European clients.

Resolving the dispute and averting supply cuts could help ease tension over the separatist rising in east Ukraine, which Kiev blames on Moscow despite Russian denials that it is arming the rebellion.

Tensions are also high following Russia's annexation of Crimea after Ukraine's Moscow-leaning president was ousted and pro-Western leaders took over power.

(Reporting by Natalia Zinets and Pavel Polityuk, Editing by Timothy Heritage)


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