Ukraine and Russia tackle gas crisis as tensions spike

Ukraine and Russia tackle gas crisis as tensions spike
Russian President Vladimir Putin.

KIEV - Ukraine and Russia were set on Wednesday to resume crunch EU-mediated gas talks aimed at ending a months-long supply cut that threatens to hit swathes of Europe this winter.

The latest negotiations in Brussels come a day after Russia stirred tensions with its war-torn neighbour still further by announcing plans to recognise the disputed leadership polls pro-Kremlin insurgents in eastern Ukraine intend to stage on Sunday.

Russian Foreign Minister Sergei Lavrov's comments drew a sharp rebuke from US Secretary of State John Kerry and coincided with a decision by EU leaders to keep sanctions in place against Moscow for its alleged meddling in Ukraine.

The former Soviet nation staged its own general election on Sunday that saw pro-European forces score a decisive victory at the expense of parties that once backed closer ties with Russia but now prefer to tread a more centrist course.

The parliamentary polls saw Western-backed President Petro Poroshenko's political bloc and a party led by Prime Minister Arseniy Yatsenyuk come close to grabbing 50 per cent of the votes needed to form their own government.

Poroshenko is busy negotiating the makeup of a new coalition that is all but certain to keep Yatsenyuk as cabinet leader - an outcome cheered by Western lenders who view him as a market-friendly proponent of economic change.

The consultations also include a new pro-European party called Samopomich (Self-Reliance) that finished third thanks to strong backing from the more nationalist and conservative voters in Kiev and western Ukraine.

Several acrimonious rounds of gas talks have failed to resolve a dispute stemming from Kiev's refusal to pay a higher rate imposed by Moscow in the wake of the February ouster of Ukraine's Kremlin-backed president.

Russia's state energy holding company Gazprom cut Ukraine's gas deliveries in June - the third such interruption in less than 10 years.

The halt did not immediately impact European clients that receive about half their Russian shipments through Ukraine.

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