Ukraine Says It Has Paid Russian Gas Bill On Time

Valentyn Zemlyansky of Naftogaz: "We have paid in full."

KYIV (Reuters) -- Ukraine today settled its bill for Russian natural gas imports in November, estimated at around $770 million, a spokesman for the state energy company Naftogaz said.

The move came as the leaders of the ex-Soviet country went in to annual talks with the European Union. EU officials and investors have been fearful of possible gas supply disruptions in the New Year.

"We have paid in full," Naftogaz spokesman Valentyn Zemlyansky told Reuters.

The bill totalled $770 million, the Finance Ministry said earlier this week.

Rows between Kyiv and Moscow over gas volumes, prices, and debts led to Russia cutting off gas supplies last January, resulting in a two-week disruption of supplies to Europe which gets a fifth of its gas from Russia via Ukraine.

This left hundreds of thousands of Europeans without heating.

Russia and Ukraine reached a new deal earlier this month in which Moscow made concessions on prices and volumes and Russian Prime Minister Vladimir Putin said he hoped there would be no new gas "shocks" in the New Year.

EU concern there could be a repetition of the winter "gas war" persists because of the dire state of the Ukrainian economy which has been hard hit by the recession.

Millions are unemployed and more cannot pay their debts after the national currency lost half of its value, jolting Central European banks that had invested heavily here.

This has placed a question mark over Ukraine's ability to pay its monthly bill, especially as the International Monetary Fund suspended its $16.4 billion bailout.

The EU, shocked that its citizens were affected by a gas dispute between two non-EU countries, has tried in the past year to help the energy sector and the financially ailing Naftogaz.

It brokered a deal for loans worth $1.7 billion to help Kyiv pay for gas and modernize the sector, provided that the government raises the subsidized domestic gas price. Kyiv promised to comply, but failed to do so.

Brussels said it would lend $500 million to help the economy, but on condition the $16.4 billion IMF program was on track. The IMF suspended that process last month until after a presidential election in Ukraine set for January 17.