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Russia and Ukraine will start talks to avoid a looming
Russia and Ukraine will start talks to avoid a looming gas dispute over unpaid debts to Russian gas giant Gazprom, Ukraine's prime minister told national media.

Ukraine's government ordered the Foreign Ministry and national gas company Naftogaz Tuesday to start talks on direct gas supplies from Russia, bypassing RosUkrEnergo, the intermediary company co-owned by Gazprom.

The move was followed by a statement from Gazprom warning it could halt gas supplies from February 11 over "unregulated" gas consumption and the former Soviet republic's growing energy debt of $1.5 billion.

"Tomorrow we begin telephone and personal talks...I think we will try to clarify the situation to understand what caused the RosUkrEnergo debt to Russia, what prevented them from paying, and why they put Ukraine in a predicament like this," Yulia Tymoshenko was quoted by the UNIAN new agency as saying.

Tymoshenko said the crisis was prompted by a lack of direct relations between Gazprom and Ukraine's Naftogaz: "More often than not, intermediaries like RosUkrEnergo disrupt both payment and gas supplies to the Ukraine," she said reassuring Ukrainians that, "Everything will be stable and secure."

Naftogaz said in a statement Friday the company has no debts to Russia.

Ukraine's president said Thursday the threat to halt gas supplies is a reaction to possible changes in transit tariffs.

Commenting on the Gazprom statement Viktor Yushchenko told the "1+1" TV channel he "generally speaking" considered it a reaction to the Ukrainian's government statement concerning possible changes in gas transit prices and excluding intermediaries in the gas supply chain.

"I do not feel like talking about gas, because they imply that my family and I have something to do with gas, I have more interesting things to deal with," he added.

RosUkrEnergo, a Swiss-registered trader, is Ukraine's sole supplier of natural gas since 2006, when Moscow and Kiev resolved their pricing dispute, which led to a brief halt in supplies affecting Europe-bound exports.

About 80% of the natural gas that Russia supplies to Europe is transited via Ukraine.

On February 5, Ukraine signed an agreement with the World Trade Organization in Geneva clearing the way for the country's membership to the global trade body in the summer. Experts say this could complicate Russia's gas talks with the country and its own WTO bid.

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