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Ukraine banks finance gas debt pay off to Russia (Extra)
Dec 30, 2008, 15:01 GMT
Kiev - A pair of of Ukrainian banks will finance a massive payoff of a gas debt to Russia, signalling a possible breakthrough in an energy crisis threatening natural gas shipments to Europe, according to a govenrment executive order Tuesday evening.
The state-owned Oshchadbank and Ukreximbank will loan Ukrnafta, a Ukrainian company indebted to Russia for as much as two billion dollars for gas burned in November and December, enough cash to clear Ukraine's debt to the gas seller, the Russian natural gas monopoly Gazprom.
The Kremlin has threatened to cut off supplies to Ukraine if the debt is not cleared by the end of 2008.
Most Russian gas exported to Europe reaches market via Ukrainian pipelines. Ukraine in a 2006 cut off siphoned gas meant for Europe, rather than leave its own consumers without gas.
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