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Ukraine in ‘emergency’ talks with European neighbors over gas imports

Ukraine president says country could get natural gas from Slovakia, Hungary and Poland, after Russia spikes price

Ukraine is in "emergency" talks with its European neighbors on the possibility of importing natural gas from them, after Moscow sharply increased the price of natural gas to the country twice this week, almost doubling it in three days, Prime Minister Arseniy Yatsenyuk said Friday.

Relations between Ukraine and Russia have turned hostile since popular protests in Kiev ousted pro-Russian President Viktor Yanukovich in February, after which Russia seized Ukraine's Crimea region and formally annexed it last month.

Yatsenyuk said Friday that Slovakia, Hungary and Poland were the main candidates from which Ukraine could get natural gas through what are known as reverse flows, which involve sending Russian gas back down pipelines used to transit it through Ukraine to other European countries.

"We are carrying out emergency talks with our European partners. One way to solve the problem is reverse gas from EU countries," Yatsenyuk told reporters. "On a technical level, the idea of reverse gas raises no problems, and we hope our European partners make the right decision. If it will be to reverse [gas], then it means the price for gas will be $150 lower than Russian gas."

However, Valery Nesterov of Moscow-based Sberbank CIB said reverse gas flows from Europe to Ukraine would represent only about 8 percent of Ukrainian demand. Ukraine covers 50 percent of its gas needs with Russian supplies and also acts as a transit country for onward supplies to European Union countries.

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The urgency of securing affordable supplies for Ukraine's struggling economy has grown since Moscow raised the heat on Kiev's cash-strapped government as part of a dispute that has widened into the biggest standoff between Russia and the West since the end of the Cold War.

Russia's previously discounted gas price to Ukraine had been part of Moscow's strategy of keeping Kiev's center of political gravity to the East and countering any leanings toward closer ties with Europe, which were the focus of the protests that ultimately brought down Yanukovich.

Yatsenyuk also told Reuters on Friday that Kiev would stick to unpopular austerity measures "as the price of independence." The Kiev government has said that without the International Monetary Fund–mandated austerity measures, the economy could shrink by up to 10 percent this year.

"We will regain trust and credibility from foreign investors. This is the road map for Ukraine," he added.

Ukraine troops leave

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Ukrainian marines take part in a welcoming ceremony in Kiev after returning from a Ukrainian military base in the Crimean city of Feodosia on March 27.
Gleb Garanich/Reuters

In a separate development, Russian Defense Minister Sergei Shoigu said Friday that all Ukrainian servicemen stationed in Crimea have been allowed to leave for mainland Ukraine but that 8,000 military men stayed and applied for permission to join the Russian army.

Russia's President Vladimir Putin and his officials said the Russian deployment to Crimea was within limits set by a deal with Ukraine on a Russian navy base in Crimea. But Moscow has never admitted that the thousands of troops who flooded the peninsula, seizing the airports and blocking the Ukrainian military at their bases, were Russian. They wore no markings, but some of them drove armored personnel carriers with Russian number plates.

Shoigu argued that Crimea faced "a threat to civilian lives and the threat of a seizure of the Russian military infrastructure by extremist organizations," so Russia "took decisive actions" and "beefed up security of Russian military infrastructure in Crimea." He stopped short of giving details, but said the military "managed to prevent bloodshed."

Shoigu also dismissed claims that the Russian army has mistreated Ukrainian servicemen as "improper and provocative." Several senior Ukrainian officers, including a military base commander, were briefly detained by the Russian forces and kept in custody for several days. 

Situation remains dangerous

Hague
Britain’s Foreign Secretary William Hague speaks before a meeting of foreign affairs ministers in Athens.
Aris Messinis/AFP/Getty Images

Meanwhile, British Foreign Secretary William Hague warned that Europe should not relax in preparing tough economic sanctions for possible use against Russia because he said very large numbers of Russian forces remained on Ukraine's eastern border. 

Hague, who made the comments as he arrived for a meeting of EU foreign ministers in Athens, Greece, said there had been only a "token withdrawal" of those forces so far and the situation remained very dangerous.

"It's very important for us to remain strong and united about the sanctions that we have implemented against individuals in Russia and Crimea, and to prepare more far-reaching measures if they become necessary," Hague said. No decision would be made at the two-day session in Athens, he added.

Wire services

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