MOSCOW--Russia won't postpone again switching to a prepayment
system for natural gas deliveries to Ukraine, which has to pay off
its outstanding debt by Monday, Gazprom's chief executive said on
Thursday.
Talks in Brussels between Moscow and Kiev on Wednesday ended in
failure, with both sides appeared to dig in their heels, setting
out their own demands on future gas prices and debts. Ukraine
threatened to refer the issue to an international court of
arbitration if Moscow made good on its threat to cut off gas
supplies.
Alexei Miller, CEO of gas monopoly Gazprom, said his company
will switch to the prepayment system if it doesn't find $1.951
billion from Ukraine on its accounts by 1000 Moscow time (0600 GMT)
on June 16, Interfax news agency reported.
Gazprom has repeatedly threatened to switch off gas supplies to
crisis-hit Ukraine but postponed the deadline for debt repayment
several times.
Mr. Miller said that the debt that Gazprom claims includes
$1.451 billion for gas deliveries in November and December. By an
extra payment of $500 million, Ukraine should show its commitment
to redeem debts for April and May supplies, he said.
Ukraine insists that a Russian offer to lower its proposed price
of gas by $100 per 1,000 cubic meters to $385 was a political move
aimed at further destabilizing Ukraine's economy. Kiev officials
have demanded a further discount, given that the latest offer
remains 44% higher than the subsidized price Ukraine was paying
before energy giant Gazprom raised the country's rates in
April.
Earlier this month, Moscow received $786 million in a partial
debt repayment, the amount Ukraine owed for gas supplies in
February and March.
Mr. Miller said that in the case of switching to the prepayment
system, Gazprom will continue supplying gas to Europe on the
Russia-Ukraine border in a full amount.
Apart from the financial crisis and the gas dispute, Ukraine is
also living through a deadly conflict with separatists in the
eastern regions of Luhansk and Donetsk.
Petro Poroshenko, a new Ukrainian president, had a "substantial
and continuous phone conversation" with Russia's President Vladimir
Putin on Kiev's plan to resolve the situation in the east of
Ukraine on Thursday. The sides also discussed steps needed to be
taken toward a cease-fire and resolve the situation peacefully, Mr.
Poroshenko's press office said.
Mr. Poroshenko also had a phone conversation with German
Chancellor Angela Merkel. According to the president's website, Ms.
Merkel said she supports the Mr. Poroshenko's initiatives and
"expressed full readiness to contribute to the process of
normalization" in eastern Ukraine.
Write to Andrey Ostroukh at Andrey Ostroukh@wsj.com