Gazprom spokesman Sergey Kupriyanov today told journalists in Moscow and London that talks between Gazprom and Naftogaz Ukrainy continue with intense complexity.

Click here to watch video from RIA Novosti (in Russian).

• The debt issue with Ukraine is not yet solved and there is no agreement for next year’s gas supplies to Ukraine.
• Supplies to Ukraine might be cut if there is no agreement, but European supplies should be undisrupted.
• Gazprom and its Ukrainian counterparts have been holding talks throughout the year, which resulted in the Memorandum of Understanding signed by Prime Ministers Vladimir Putin and Yulia Timoshenko, which outlined the process of reaching a new supply agreement going forward.
• Ukraine wants to sign a new direct agreement without considering the accrued debt, but this is not acceptable for Gazprom.
• At this point Ukraine is the main transit route for European gas supplies from Russia.
• A transit contract for European supplies is in place and Ukraine has declared it will honour its contractual obligations. However, Gazprom has told its European partners that considering how Ukraine treats other contracts it cannot guarantee that European gas supplies transiting Ukraine will be undisrupted.
• Gazprom has offered Ukraine to pay the debt via a prepayment of transit fees by Gazprom, but no decision has been taken on this option.
• Sergey Kupriyanov reiterated that the MoU of 2^nd October 2008 included a gradual transition of gas prices to market levels over a three-year period, if all debts are paid. However, if debt payments have not been met, the price for gas supplied to Ukraine would reach market levels as of 1 January 2009 and this would mean a price of $418 per 1,000 cubic meters.