( dpa ) - Russian gas monopoly Gazprom on Friday failed to reach an agreement with Ukraine's Naftogaz CEO Igor Didenko who flew to Moscow for talks to avert the company's threat to cut gas supplies, news agency Interfax reported.
"The meeting Friday proved Ukraine's lack of readiness to understand the essence of the current problems," the gas monopoly's spokesman Sergei Kupriyanov said Friday.
Gazprom said it had taken first preparatory steps to turn off the taps to Ukraine starting Tuesday if Kiev did not pay outstanding debts claimed by the company.
Kupriyanov said Ukraine had run up a 1.5-billion-dollar debt on imported gas and set a Monday deadline for settling the bill.
A senior Ukrainian official meanwhile Friday predicted continued Russian gas supplies to Europe despite the energy giant's warning to stall supplies feeding westward to central Europe.
"The gas will continue to flow, you can turn on your burners with confidence," said Ukraine's Vice Prime Minister Oleksander Turchinov. "There is not going to be a cut-off."
Turchinov is a key official in Ukraine's pro-Europe government and a close associate of Prime Minister Yulia Tymoshenko. He is a former head of Ukraine's national intelligence agency SBU.
"What is happening is that change in the structure of gas purchases is taking place we are moving from middleman companies to a direct relationship between Ukraine and Gazprom," Turchinov said.
"Detailed talks will begin on February 11 (the Gazprom deadline), and I think we will reach this goal," he said. "But there will be no breaks in supply."
Arguments between Gazprom and Ukraine over the size of Ukraine's debt for natural gas are chronic, and often nerve-wracking for Europe, which receives some 80 per cent of Gazprom's exports via pipelines crossing Ukraine.
A late 2005 pricing dispute led to Gazprom declaring the Ukrainians cut off, at which the Ukrainians siphoned a portion of the gas moving onward to Europe as transit payment.
The disagreement was resolved in a week, but retail gas prices as far away as France spiked as a result.
Turchinov said, the present conflict had resulted from the failure of two middleman companies, one inside Ukraine and one outside Ukraine, to transfer payments for gas used from the Ukrainian national gas distribution company Naftohaz-Ukrainy to Gazprom. Calculation of actual debt is hazy, as Gazprom holds a 50-per-cent stake in RusUkrEnergo, the Swiss middleman company outside Ukraine, while Naftogaz-Ukrainy holds a 50-per-cent stake in UkrGaz-Energo, the middleman joint venture company inside Ukraine.
Turchinov has long been a top critic of both middleman companies, saying they artificially inflate the cost of Russian gas sold to Ukraine and dangerously extend Russian Gazprom's influence over Ukraine's natural gas distribution network.
Turchinov's comments came a day after his boss Tymoshenko in a 1+1 national television interview told viewers her government considered direct payments by Ukraine to Russia for natural gas a top priority.
Ukraine possesses sufficient natural gas reserves not only to cover its own needs, but to continue stable supplies to Europe, she said.
