Russia extends deadline for Ukrainian gas payments

Russia's state gas company Gazprom says it is giving Ukraine another week before it starts demanding prepayment for gas, without which it could cut off supplies.

The decision to push forward the date from Tuesday to next Monday gives Russia and Ukraine time to resolve a dispute that could cause disruptions of gas supplies to Europe.

The company had said previously that starting Tuesday it would only deliver gas that had already been paid for, raising the prospect of supplies to Ukraine being cut off immediately and disruptions in onward gas flows to Europe.

Gazprom's Chief Executive Alexei Miller on Monday acknowledged the payment from Ukraine for the February and March supplies. 

"Ukraine has paid the first installment for gas supplies. Today $786 million entered Gazprom's account," Miller was quoted as saying in a company statement on Monday.

Miller said a decision on whether to charge Ukraine for gas in advance would depend whether Kiev pays its dues for April and May supplies.

Gazprom has signaled that if Kiev continues to delay the payments, it will have to switch to prepayment, potentially triggering a halt in supply to Ukraine. 

Russian natural gas transits through Ukraine supply about 15 percent of European needs, and Guenther Oettinger, the European Union mediator, has been urgently seeking a compromise to save 18 member states from seeing their deliveries start dwindling.

Gazprom now says it is willing to discuss a lower price and analysts believe that a compromise is in sight because Russia would prefer to avoid complicating its relations with Europe further.

Wire services