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'Last chance' gas talks drag on Russian gas to flow again shortly
(about 1 hour later)
Delicate, high-level talks in Moscow between Russia and Ukraine on the dispute disrupting gas supplies to Europe are continuing into the night. Russian Prime Minister Vladimir Putin has said agreement has been reached at talks in Moscow to resume gas exports to Europe via Ukraine shortly.
Earlier, Moscow sources suggested Ukrainian PM Yulia Tymoshenko lacked the authority needed to close a deal. Ukrainian PM Yulia Tymoshenko said gas supplies would resume as soon as the two countries' energy companies drew up contracts, Russian media report.
Despite public differences with President Viktor Yushchenko, sources in Kiev insisted she had a full mandate. The gas dispute between Moscow and Kiev has crippled supplies of Russian gas to much of central and eastern Europe.
The EU has said the talks are Kiev and Moscow's "last chance" to show they are credible partners. The parties were under pressure from Brussels to reach a deal this weekend.
See map of affected area See map of affected area
EU states import a quarter of their gas from Russia and 80% of supplies come via Ukraine. Almost 20 countries in Europe have been affected by the dispute.EU states import a quarter of their gas from Russia and 80% of supplies come via Ukraine. Almost 20 countries in Europe have been affected by the dispute.
Russia switched off the gas this month, accusing Ukraine firstly of failing to pay for its own supply, then later of stealing gas meant for other countries.Russia switched off the gas this month, accusing Ukraine firstly of failing to pay for its own supply, then later of stealing gas meant for other countries.
Some central and east European states have been reduced to rationing gas, while others have been seeking alternatives to the Ukrainian pipelines.Some central and east European states have been reduced to rationing gas, while others have been seeking alternatives to the Ukrainian pipelines.
An emergency summit called by Russian President Dmitry Medvedev for Saturday ran into difficulty after EU leaders heeded a call by the Czech Republic, which holds the EU's rotating presidency, to stay away in order for Brussels to speak with one voice.An emergency summit called by Russian President Dmitry Medvedev for Saturday ran into difficulty after EU leaders heeded a call by the Czech Republic, which holds the EU's rotating presidency, to stay away in order for Brussels to speak with one voice.
The gas dispute has created the EU's worst ever energy crisis, the BBC's Richard Galpin reports from Moscow.The gas dispute has created the EU's worst ever energy crisis, the BBC's Richard Galpin reports from Moscow.
'As long as needed' Ukrainian divisions
Saturday's talks opened with a meeting between Mrs Tymoshenko and Russian Prime Minister Vladimir Putin.Saturday's talks opened with a meeting between Mrs Tymoshenko and Russian Prime Minister Vladimir Putin.
No EU head of state attended the Moscow gas summitNo EU head of state attended the Moscow gas summit
Officials from Russia's Gazprom and Ukrainian state energy company Naftogaz later joined them at government house. Officials from Russia's Gazprom and Ukrainian state energy company Naftogaz later joined them at government house and the talks dragged into the night.
With no sign of an early breakthrough, Mr Putin's spokesman announced that "broader talks" had begun. On the eve of the talks, sharp divisions emerged between Ukraine's president and prime minister, political foes in a fragile coalition government.
"They will last as long as is needed," Dmitry Peskov added.
A source close to the Russian side said it appeared that Mrs Tymoshenko, a former gas trader, lacked the necessary mandate to discuss a solution and had come to Moscow "empty-handed", Reuters news agency reports.
This was rebutted by a source in President Yushchenko's office in Kiev who said: "The prime minister has a full mandate at the talks. Otherwise, she would not be taking part in them."
But, on the eve of the talks, sharp divisions emerged between Ukraine's president and prime minister, political foes in a fragile coalition government.
Mr Yushchenko's office insisted the Moscow talks must combine gas supplies to Ukraine with transit supplies to Europe in "a single package".Mr Yushchenko's office insisted the Moscow talks must combine gas supplies to Ukraine with transit supplies to Europe in "a single package".
Mrs Tymoshenko for her part 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."Mrs Tymoshenko for her part 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."
"Simply speaking, I need two things: Don't throw a spoke in the wheel and don't stab any backs," she said before leaving Kiev."Simply speaking, I need two things: Don't throw a spoke in the wheel and don't stab any backs," she said before leaving Kiev.
'Last chance''Last chance'
Speaking after the summit, which was attended by the Czechs and non-EU states which also receive Russian gas, President Medvedev said he was certain the transit dispute would be resolved "in the nearest future".Speaking after the summit, which was attended by the Czechs and non-EU states which also receive Russian gas, President Medvedev said he was certain the transit dispute would be resolved "in the nearest future".
Ukrainians burn a poster of Mr Putin as a Gollum figure turning off a gas pipeUkrainians burn a poster of Mr Putin as a Gollum figure turning off a gas pipe
He also reiterated Moscow's position that Kiev had to pay European-level prices for gas supplies - a jump from $179.5 per 1,000 cubic metres to $450.He also reiterated Moscow's position that Kiev had to pay European-level prices for gas supplies - a jump from $179.5 per 1,000 cubic metres to $450.
"There is nothing damaging about that - it's the money our other partners pay and Ukraine is in a position to pay it," he said."There is nothing damaging about that - it's the money our other partners pay and Ukraine is in a position to pay it," he said.
Ukraine, which is gripped by an economic crisis, says it cannot afford such high prices and wants Russia to pay higher transit fees. Ukraine, which is gripped by an economic crisis, has said it cannot afford such high prices and wants Russia to pay higher transit fees.
Russia is seeking a deal with EU firms to cover part of the cost of pumping gas from Russia to Europe.Russia is seeking a deal with EU firms to cover part of the cost of pumping gas from Russia to Europe.
In Brussels, the Czech presidency said it was not satisfied by the gas talks in Moscow and urged both sides to reach a deal. In Brussels, the Czech presidency urged both sides to reach a deal.
"We expected both parties to announce that they had reached an agreement on the resumption of Russian gas supply to the EU via Ukraine - this was not the case," said Czech Industry and Trade Minister Martin Riman.
Earlier, European Commission spokesman Johannes Laitenberger said the Moscow talks offered "the last and best chance for Russia and Ukraine to demonstrate they are serious about resolving this dispute".Earlier, European Commission spokesman Johannes Laitenberger said the Moscow talks offered "the last and best chance for Russia and Ukraine to demonstrate they are serious about resolving this dispute".
"The gas must flow," he added. "We will regard this period as a test case for judging whether or not they are credible partners.""The gas must flow," he added. "We will regard this period as a test case for judging whether or not they are credible partners."
  
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