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Russia gives Ukraine another week to pay for gas before shutoff

MOSCOW — Russia gave Ukraine an extra week to pay in advance for this month's gas supplies or risk a cutoff, at the start of a week of international talks on the crisis in the former Soviet republic.

The move to a prepayment regime, originally set for Tuesday, was moved back to June 9, Alexey Miller, the chief executive officer of Russian gas export monopoly OAO Gazprom, said in an e-mailed statement Monday. He made the announcement after Ukraine made its first payment for gas in months, transferring $786 million for supplies received in February and March. Ukraine still owes Gazprom for supplies in April and May.

The Russian move came as it was set to resume talks with Ukraine in Brussels Monday on a deal to keep the gas flowing between the countries amid their conflict over separatists trying to break away from the government in Kiev. It also comes before President Vladimir Putin visits France for ceremonies marking the 70th anniversary of the allied landings in France in World War II.

"Moscow possibly did not want the prospect of gas cuts this week to dominate the agenda and sour the mood for Putin's visits," Tim Ash, head of emerging-markets research at Standard Bank in London, said in an e-mail.

Putin and French President Francois Hollande are scheduled to meet June 5 before the Russian leader crosses paths with U.S. President Barack Obama at the D-Day events in Normandy a day later. A week of international engagement over Ukraine also includes meetings in Brussels of NATO defense ministers and of Group of Seven leaders, who boycotted a planned summit in Sochi to be hosted by Putin. Obama starts his tour of Europe Tuesday in Poland, which shares a border with Ukraine.

Russia's Micex stock index has climbed more than 11 percent in the past month.

NAK Naftogaz Ukrainy, Ukraine's state-run gas company, said it sent a draft agreement before Monday's talks "to settle all disputed issues" in a move "aimed at constructive talks with Gazprom." The proposal includes changes to "the price, volume and conditions of gas supply," Naftogaz said in an e-mailed statement.

Ukraine carries about 15 percent of the natural gas used by Europe through its Soviet-era pipelines and accuses Russia of using gas as a political weapon by ramping up prices.

In Ukraine this morning, the Border Guard Service said it repelled an assault by as many as 200 rebels on its headquarters in the eastern city of Luhansk in the early hours. Some border guards were wounded in fighting that saw separatists shooting from residential buildings, the service said on its website.

Separatists who attacked a military checkpoint in the suburbs of the city of Slovyansk last night were also repulsed, the spokesman for the government's operation against the rebels, Vladyslav Seleznyov, said on Facebook.

"Our army was in very poor condition, and she remains poor even now," Ukraine's acting defense minister, Mykhaylo Koval, said Sunday in an interview with Channel 5 television. "But the army rose from its knees, and the army is bearing all anti- terrorist issues on its shoulders."

He said 24,000 bullet-proof vests produced in Ukraine are on order and "all our helicopters, of the National Guard and State Border Service, will be equipped with defense systems against portable anti-aircraft weapons."

Leaders in Kiev and in the U.S. and EU say Putin has encouraged strife by sending the separatists cash, arms and manpower. Russia says Ukraine's army should stop targeting its own citizens, a sentiment echoed Sunday by Czech President Milos Zeman, whose country is a member of the EU and the North Atlantic Treaty Organization.

"When the Ukrainian army, including paramilitary organizations, fight against their own citizens, they are still citizens of Ukraine," Zeman said in an interview on Czech television. "They should also realize that if it really comes to civil war, it would be a very comfortable pretext for the Russian Federation to invade."

Crimea adopted the ruble in a further step toward integration with Russia, which annexed the Black Sea peninsula in a move that Ukraine and its allies have denounced as illegal.

Crimean shops will no longer use double-pricing in hryvnia and rubles, and all transactions will be carried out solely in the Russian currency, Russia's central bank said in a statement.

Reported with assistance from Michael Winfrey in Prague and Ewa Krukowska in Brussels.

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