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Gas row overshadows Moscow talks Urgent talks on Ukraine gas row
(about 5 hours later)
Ukrainian President Viktor Yushchenko is due in Russia in an effort to improve ties between the two countries. Ukrainian President Viktor Yushchenko is due in Moscow to try to avert Russia cutting gas supplies to his country in a dispute over an unpaid bill.
His discussions with President Vladimir Putin come amid a dispute over gas debts that could see Moscow cutting its gas supply to Ukraine. He has just five hours with President Vladimir Putin to settle the row over a demand by Russian gas monopoly Gazprom for Ukraine to pay $1.5bn.
Russian gas monopoly Gazprom said it will reduce supplies to Ukraine if the country does not repay debts of $1.5bn. Russia has threatened to switch off supplies but Kiev disputes the bill.
Gazprom, which supplies 25% of Europe's gas, said the dispute will not affect supplies to the rest of Europe. Gazprom, which supplies 25% of Europe's gas, said the disagreement would not affect supplies to the rest of Europe.
But as most of the company's gas supply to western Europe passes through Ukraine, concerns remain that the row could escalate into a repeat of two years ago.But as most of the company's gas supply to western Europe passes through Ukraine, concerns remain that the row could escalate into a repeat of two years ago.
Deep suspicion
In January 2006, gas shipments to Europe were disrupted after Russia halted fuel supplies to Ukraine for several days amid a fierce argument over price hikes.In January 2006, gas shipments to Europe were disrupted after Russia halted fuel supplies to Ukraine for several days amid a fierce argument over price hikes.
US concern
Although Gazprom claims the current dispute is purely commercial, fears have been raised that Moscow might be exploiting its energy resources to exert political pressure on its neighbours.Although Gazprom claims the current dispute is purely commercial, fears have been raised that Moscow might be exploiting its energy resources to exert political pressure on its neighbours.
US State Department spokesman Sean McCormack said Washington was monitoring the situation. Ukrainian PM Yulia Tymoshenko said Russia would not cut supplies
"We've made it quite clear in the past our views as to the use of commercial levers to try to achieve some political purpose in the end," he said. The BBC's Richard Galpin in Moscow says the crux of this latest crisis seems to be over how the bill is to be paid.
Ukraine's pro-Western Prime Minister Yulia Tymoshenko wants the money paid directly to Gazprom, rather than going through an intermediary company - RosUkrEnergo - which she views with deep suspicion.
On Monday, Gazprom and the Ukrainian state energy companies failed to resolve the gas debt dispute during several hours of talks.On Monday, Gazprom and the Ukrainian state energy companies failed to resolve the gas debt dispute during several hours of talks.
Gazprom extended its deadline for cutting a quarter of gas supplies to Ukraine until 1500GMT on Tuesday, to allow Mr Yushchenko to discuss the matter with Mr Putin. Gazprom extended its deadline for cutting a quarter of gas supplies to Ukraine until 1500GMT on Tuesday - raising hopes the row could be settled in time.
Meanwhile, Ukraine's pro-Western Prime Minister Yulia Tymoshenko appealed for calm and suggested that Gazprom's threats were empty. Ukraine's prime minister has suggested that Gazprom's threats were empty.
She said that Russian First Deputy Prime Minister Sergei Ivanov had informed her "that a cut-off will not take place". She said Russian First Deputy Prime Minister Sergei Ivanov had informed her supplies would not be cut.
Our correspondent says Moscow does not like President Yushchenko or his prime minister.
Both were leaders of the Orange Revolution three years ago that swept away a pro-Russian government in Ukraine and replaced it with one that looks to the West for support and now wants to join Nato.
US state department spokesman Sean McCormack said Washington was monitoring the gas dispute.