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Naftogaz Makes ?€?Difficult?€™ Payment

Tymoshenko wearing a medical mask last week. She and Yushchenko have been sparring on swine flu and Russia. Alexander Prokopenko

Naftogaz Ukrainy has paid Gazprom for October gas supplies on time, but the process proved “extremely difficult” because of opposition from the president and Central Bank, Ukrainian Prime Minister Yulia Tymoshenko said Friday.

Naftogaz later confirmed that it paid the October bill. A Gazprom spokesman declined to comment on whether the payment had been received, saying only that the money was expected by Monday.

Tymoshenko said her rival President Viktor Yushchenko and the Central Bank had thrown obstacles in the way of the payment, the latest public sign of behind-the-scenes struggles ahead of a presidential election planned for Jan. 17.

Her comments in a three-paragraph statement reflect a similar charge made by Prime Minister Vladimir Putin, who in October warned that Yushchenko risked provoking a fresh crisis over gas supplies. In an interview to Der Spiegel magazine, President Dmitry Medvedev made similar charges.

The payment problem “is linked to the election campaign in Ukraine, where one power harms another in an attempt to score political points,” Medvedev said in an advance copy of the interview released Saturday.

Tymoshenko and former Prime Minister Viktor Yanukovych are frontrunners in the first presidential election since the 2004 Orange Revolution. Polls show that Yushchenko is unlikely to win.

“Today we paid Russia the next $500 million,” Tymoshenko said in the statement. “Is anyone asking the government how it is paying for gas while there is a full blockade from the side of the Central Bank and the president, and with the fact that local utilities are paying 50 percent to 60 percent of the price of the gas they use?”

The Central Bank and the president’s office have not answered her comments, but both said money from the International Monetary Fund would be used to pay for the gas, giving no indication that they wanted to obstruct the transaction.

Shirvani Abdullayev, a gas analyst at Alfa Bank in Moscow, said he thought it was a matter of time before Ukraine fails to make a payment.

“Ukraine’s economy is in chaos,” Abdullayev said. “But if someone in Ukraine wanted a reasonable solution, it would be found. But the problem is, none of the Ukrainian political forces is able to come up with a particular agenda for relations with Russia.”

An EU Commission spokesman said Friday that Ukraine had informed the bloc that it has 25 billion cubic meters of gas in storage, enough to avoid disruptions to flows this winter.

In previous gas disputes, Moscow suggested that the payment problems would be settled if Ukraine were to agree to sell its pipeline network to Russia, although the country’s constitution does not allow its sale to foreigners.

But Moscow hasn’t lost hope, analysts said, and it now may be pushing even harder.

“The only thing that could prevent the escalation of this conflict is Ukraine selling or promising to sell the Ukrainian pipeline to Russia,” Abdullayev said. “Russia feels this is about time.”

Naftogaz first deputy CEO Ihor Didenko was in Moscow on Friday to “discuss amendments to the contracts” with Gazprom, spokesman Valentyn Zemlyanskyi said, declining to elaborate. 

(Reuters, AP, Bloomberg)

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