KIEV (Bloomberg) -- Ukraine sought assistance from the European Union in resolving its dispute with Russia over the pricing of gas supplies as OAO Gazprom increased natural-gas deliveries to Europe via three alternative routes.

NAK Naftogaz Ukrainy Chief Executive Officer Oleh Dubina said talks had reached a “dead end.” Russia’s state-owned gas exporter said it boosted shipments along two routes through Belarus and one to Turkey.
Officials from both Russia and Ukraine have each visited the Czech Republic, which holds the European Union’s rotating presidency, in the past three days, with neither side showing signs of resolving the impasse that led Gazprom to cut gas supplies to Ukraine on Jan. 1.
“Both sides will need to find a compromise,” Alexander Rahr, director of Russian programs at the German Council on Foreign Relations in Berlin, said by phone. “The risk if they don’t is they both will lose and suffer financially.”
Russia supplies a quarter of Europe’s gas, 80 percent of which is transported through Ukraine. A similar dispute in 2006 disrupted supplies to Europe, prompting the EU to call for supply and transit commitments to be honored “under all circumstances.”
“We have missed all deadlines to sign an agreement between Ukraine and Russia ourselves,” Dubina said in an interview broadcast late Saturday on Ukraine’s Channel 5 television. “We probably need the EU to be involved in the process.”
-----------------------Interruptions
Gazprom Deputy Chairman Alexander Medvedev said on Sunday the Russian company is “willing to meet” with Ukrainian officials immediately.
“We implore Ukraine to come back to Moscow to negotiate once and for all a mutually acceptable gas supply deal,” he said in an e-mailed statement.
Gazprom increased supplies along by the Yamal-Europe pipeline and Beltransgaz system, both which cross Belarus, and the Blue Stream link to Turkey after halting shipments to Ukraine as the two sides failed to agree on 2009 prices for supplies and transit. Bohdan Sokolovskyi, Ukrainian President Viktor Yushchenko’s energy adviser, said on Saturday the shutoff may cause difficulties in pumping gas to Europe in the next 10 to 15 days because of falling pipeline pressure.
“In such conditions and in January temperatures, the system will automatically stop renewing pressure,” Sokolovskyi told reporters in Kiev. “In other words, we will have serious interruptions of transit via Ukrainian territory.”
----------------------Belarus, Turkey
It’s unlikely that Gazprom’s supplies skirting Ukraine will be enough to meet European needs for a sustained period, Rahr said.
“It’s very difficult to circumvent gas around Ukraine, otherwise they would have done it before,” Rahr said.
Ukrainian Energy Minister Yuriy Prodan is leading a delegation to the EU. Gazprom Deputy Chief Executive Officer Alexander Medvedev on Saturday held meetings in the Czech capital.
“The European Union calls for an urgent solution to the commercial dispute on gas supplies from the Russian Federation to Ukraine, and for an immediate resumption of full deliveries of gas to the EU member states,” the Council of the European Union said in a statement.
Gazprom said Jan. 2 it had boosted deliveries via Belarus to compensate for shortages caused by siphoning in Ukraine. Chief Executive Officer Alexei Miller said on Saturday his company plans to seek international arbitration to ensure transit via Ukraine. Naftogaz, Ukraine’s state-run energy company, said the siphoning accusations “have no basis in fact.”
---------------------Ukraine’s crisis
Polskie Gornictwo Naftowe i Gazownictwo SA’s supplies from Ukraine had fallen by 11 percent late Jan. 2 and shipments from Belarus are offsetting them, Joanna Zakrzewska, spokeswoman for Poland’s largest gas company, said by phone on Saturday.
Deliveries of gas from Russia to Romania have dropped by 30 percent since the start of the dispute, Agence France-Presse reported. The country is receiving 7 million cubic meters, down from its usual 10 million cubic meters, the news service cited Ioan Rus, director of pipeline operator Transgaz, as saying.
Ukraine is transporting 283 million cubic meters of gas to Europe a day and the country’s partners will understand that any transit difficulties “are not caused by the Ukrainian side,” Sokolovskyi said. Gazprom’s Posyagin said deliveries via Yamal- Europe went up by 20 million cubic meters, and by shipments were increased by 6 million cubic meters each via the other two routes.
Gazprom on Jan. 1 withdrew an offer to sell Ukraine gas at $250 per 1,000 cubic meters as Ukraine, which relies on Russian gas for 70 percent of its needs, sought a cheaper rate. Ukraine must now pay a European market price of $418, Gazprom said.
----------------------Return to 2005?
Ukraine’s political leadership, grappling with a financial crisis that has forced it to seek a $16.4 billion International Monetary Fund bailout, said $201 would be a fair price. Naftogaz proposed a price of $235 per 1,000 cubic meters on Dec. 31 before talks broke down.
Russia said its $250 offer already marked a concession to Ukraine, pointing out that Gazprom will pay an average of $340 per 1,000 cubic meters of gas from three Central Asian nations in the first quarter.
Naftogaz said it’s ready to return to a 2005 agreement to resolve the current standoff by allowing Gazprom to pay for transit with gas supplies. The Ukrainian company is seeking 23 billion cubic meters of fuel from Russia this year in exchange for pumping gas to Europe, Chief Executive Officer Oleh Dubina said in an e-mailed statement.
“From 2010, we are ready to take 28 billion cubic meters of gas to 29 billion cubic meters of gas a year in exchange for transit,” Dubina said.
--------------------No timetable
The proposal is odd and has no legal basis because Gazprom has a transit contract through 2010, Gazprom spokesman Sergei Kupriyanov said, according to state-run news service RIA Novosti.
Gazprom has no information about when the Ukrainian side intends to return to the negotiating table, Deputy CEO Valery Golubev said in comments at a company meeting chaired by Miller on Sunday and shown on state television.
“They are going to renegotiate because neither Ukraine nor Russia can afford to have its image deteriorate in the eyes of the West,” Rahr said. “Ukraine has to fulfill its obligation and live up to its image as a transit country for oil and gas from the East to the West. Russia has to make sure Europeans will get their gas and trust Russia as one of the biggest and most important suppliers.”
Naftogaz on Dec. 31 also asked for a transit rate for gas from Russia of $1.80 per 1,000 cubic meters per 100 kilometers (62 miles). That compares with the agreed 2008 rate of $1.70. Dubina said on Saturday Ukraine is now seeking a transit fee of $2.05. Russia is refusing to renegotiate the transit tariff, saying its agreement runs until the end of 2010.