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Page last updated at 19:35 GMT, Saturday, 17 January 2009

'Last chance' gas talks stumble

Russian PM Vladimir Putin and Ukrainian PM Yulia Tymoshenko
Russia's Vladimir Putin and Ukraine's Yulia Tymoshenko are in Moscow

High-level talks in Moscow between the prime ministers of Russia and Ukraine have so far failed to resolve the dispute disrupting supplies of gas.

Moscow has indicated that the Ukrainian PM Yulia Tymoshenko does not have the full authority needed to negotiate a deal, a claim denied by Ukraine.

Almost 20 countries in Europe have been affected. Russia supplies gas to Western Europe via Ukraine.

It switched off the gas this month amid payment and theft allegations.

Earlier, the EU said the talks were Kiev and Moscow's "last chance".

Some central and east European states have been reduced to rationing gas, while others have been seeking alternatives to the pipelines carrying Russian gas via Ukraine.

Russia's President Dmitry Medvedev said he hoped gas deliveries would begin in the next few days.

The BBC's Richard Galpin in Moscow says Brussels stepped up pressure to bring an end to the EU's worst ever energy crisis, ahead of Saturday's meeting between Russian Prime Minister Vladimir Putin and the Ukrainian PM.

European Commission spokesman Johannes Laitenberger said the talks "offer the last and best chance for Russia and Ukraine to demonstrate they are serious about resolving this dispute".

Ukrainian demonstrators outside the Russian embassy in Kiev, 15 January
Ukrainians burn a poster of Mr Putin as a Golem figure turning off a gas pipe
"The gas must flow. We will regard this period as a test case for judging whether or not they are credible partners."

EU states import a quarter of their gas from Russia and 80% of supplies come via Ukraine.

Russia halted supplies of gas to Ukraine on 1 January after talks on the price Kiev should pay in 2009 collapsed.

A week later it cut the supply to Europe via Ukraine, saying it was forced to do so because Kiev was stealing the gas.

Ukrainian officials deny the allegation and accuse Russia of provoking the crisis.

Rival positions

Mr Putin, fresh from a visit to Germany, one of Moscow's biggest gas clients, said on Friday that a deal could be nearer after he discussed the formation of a gas transit consortium.

He said a deal was being brokered between Russia's Gazprom and EU firms to cover part of the cost of pumping gas from Russia to Europe.

It is not clear whether Ukraine would accept such a deal.

Meanwhile, divisions exist in Ukraine over the domestic supply and transit supplies.

Ukrainian President Viktor Yushchenko has said the two contracts were linked but Mrs Tymoshenko, his political rival, argued they were not connected.

"The issue of natural gas supplies to Ukraine and the issue of transit are interlinked and must be discussed as a single package," Mr Yushchenko's office said on the eve of the Moscow talks.

Speaking the same day, Mrs Tymoshenko said: "The Ukrainian government does not link the issue of concluding an agreement on [Russian] gas supplies to Ukraine with the issue of resuming gas transit to Europe."

Such a link, she added, would be "groundless and unfair".

She also demanded that Ukraine speak with one voice in the negotiations.

"Simply speaking, I need two things: Don't throw a spoke in the wheel and don't stab any backs," she said in Kiev.

Russian President Dmitry Medvedev has invited EU leaders to an emergency gas summit on Saturday but it appears that only envoys will be sent, including EU Energy Commissioner Andries Pielbags.

Russian Foreign Minister Sergei Lavrov was scathing about the decision not to send EU heads of state.

"We expect anyone interested in resolving the problem as soon as possible to come to the summit being held in Moscow tomorrow," he said on Friday.

He urged the EU to "show its famous solidarity" and put pressure on Ukraine.

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Sydney Morning Herald EU piles pressure as Kremlin hopes for gas crisis deal - 1 hr ago
Reuters UPDATE 1-Putin spokesman: EU not helping gas talks - 1 hr ago
Itar Tass "The main thing is we managed to have an open, fruitful and friendly exchange of opinions about the gas ... - 1 hr ago
Washington Post No solution yet to gas crisis, talks go on: Medvedev - 2 hrs ago
CNN Russia: Gas to resume within days - 2 hrs ago

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