Russia and Ukraine have a "good chance" of striking a deal to resolve a standoff over Russian gas deliveries to Ukraine by June 1, European Energy Commissioner Guenther Oettinger said Monday.
A view of a pressure valve on a pipeline at the Bilche-Volytsko-Uherske underground gas storage facility, the largest in Europe, not far from the village of Bilche village, in the Lviv region of western Ukraine, on May 21, 2014
"We made relatively good progress and have a good chance of reaching an agreement by June 1," said Oettinger after a Berlin meeting with Russian Energy Minister Alexander Novak and his Ukrainian counterpart Yuri Prodan.
Europe is locked in a confrontation with Russia over Ukraine, where Brussels believes the Kremlin has supported pro-Moscow separatists and worked to destabilise the Western-leading transitional government by threatening to cut off gas supplies.
Amid the standoff, Russian energy giant Gazprom has hiked gas prices and toughened conditions for former Soviet satellite Ukraine.
Gazprom had warned Kiev it would suspend its gas deliveries on June 3 if Ukraine does not by then settle its bill for June, worth $1.66 billion. Moscow has also said Ukraine had amassed a gas debt of $3.5 billion.
Oettinger said that under a deal being considered, Ukraine would initially pay $2 billion to Gazprom by Thursday, if the government in Kiev agrees, and Russia would then be ready to renegotiate the price of future deliveries.
A $500 million payment from Ukrainian gas company Naftogaz would follow on June 7 under the proposed plan.
Prodan told media after the Berlin meeting that "Ukraine is prepared to pay the debt fully."
The threats from Russia have raised deep concerns in the European Union, which imports a quarter of its gas from Russia, nearly half of which flows via Ukraine.
Europe saw disruptions in supplies in 2006 and 2009 when Ukraine dipped into deliveries during previous price disputes with Moscow.
German Chancellor Angela Merkel said earlier Monday "it is important that the energy talks make progress ... I hope an agreement can be reached this week. That is very important."
Russia had also hiked its gas price for Ukraine for April and May to 485 dollars per 1,000 cubic metres, one of the highest among European countries. On average, EU countries pay between 350 and 400 dollars per 1,000 cubic meters.