New gas row on eve of Ukraine leader`s Moscow trip

10:48, 11 February 2008
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Threatening to complicate ties between Moscow and Kyiv

A new row over gas supply payments burst into the open on the eve of Ukrainian President Viktor Yushchenko`s visit to Russia, threatening to complicate attempts to consolidate ties between Moscow and Kyiv, according to Reuters.

The pro-Western leader`s talks with outgoing Russian leader Vladimir Putin in Moscow, which he visits on Tuesday, will also expose the growing differences he has with Ukraine`s Prime Minister Yulia Tymoshenko.

The rare talks between the presidents of two Slav nations that once formed the backbone of the Soviet Union were to have focused on strategic issues.

But a sudden new threat by Russian gas giant Gazprom (GAZP.MM: Quote, Profile, Research) to cut gas over payment arrears is certain now to take centre stage.

"Gazprom is flexing its muscles ahead of President Yushchenko and Prime Minister Tymoshenko`s planned visits to Moscow," said Alexander Burgansky of Moscow-based Renaissance Capital brokerage.

"We do not believe the current stand-off should lead to any supply cuts to Europe and expect the matter to be swiftly resolved."

A row over gas supplies between the two countries in 2006 disrupted supplies to parts of western Europe.

Russian First Deputy PM Sergei Ivanov told reporters in Munich: "the payments were to be made on a monthly basis and since then we`ve been expecting those payments".

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