Russia and Ukraine will seek a temporary deal next week to resolve a natural gas pricing dispute after failing to sign an accord in talks brokered by the European Union.

While negotiators agreed on debt repayment terms, the financial resources for advance payments for future deliveries still need to be discussed, Russian Energy Minister Alexander Novak said yesterday. Yuri Prodan, his Ukrainian counterpart, said the amount of gas supplied in the coming months has yet to be determined. The next round of talks is scheduled for Oct. 29.

The 28-nation EU, which depends on Russian gas piped across Ukraine for about 15 percent of its demand, is trying to broker a deal between the former Soviet allies as winter nears. State-run OAO Gazprom (OGZD), Ukraine’s main gas supplier, halted deliveries in June as a separatist conflict raged in the east of the country. While shipments to Europe haven’t been disrupted, the EU is seeking to avoid a repeat of supply cuts experienced during 2006 and 2009 disagreements.

“Everyone’s got some homework to do and we decided we’ll meet next Wednesday having prepared everything for a decision on that day,” EU Energy Commissioner Guenther Oettinger said yesterday in Brussels. “Now we have some prospects of a secure supply situation this winter for all European citizens.”

‘Clear Signal’

A proposed deal to restore flows from Moscow-based Gazprom to NAK Naftogaz Ukrainy needs to be discussed by the governments and companies involved, Oettinger told reporters after the trilateral meeting. Under the draft agreement, Ukraine would pay $3.1 billion by year-end for previously delivered supplies. In return, Russia would cut its price by $100 per thousand cubic meters to $385 through March.

Germany is “very interested in a quick solution” to the gas row between Ukraine and Russia and a solution would be a“clear signal of de-escalation” of the crisis, German government spokesman Steffen Seibert told reporters today in Berlin.

Ukraine is ready to sign a temporary gas deal with Russia before the international arbitration court in Stockholm decides on Gazprom and Naftogaz claims over contract price and terms of supplies, Prodan said. Such an agreement must be signed by both companies so that it couldn’t be changed, he said.

Compromise Target

“The Ukrainian side understands that Ukrainian and EU energy security seriously depends on restoring gas supply,” he told a news conference after the talks. “That is why we say today and we have said before that we are ready to look for a compromise decision.”

Negotiators estimated Ukraine will need 4 billion cubic meters of gas by the end of this year and the payment for those supplies can’t yet be guaranteed, according to Oettinger.

“We offered -- if Naftogaz was not able to pay -- to have a European company to act as intermediary,” Oettinger said. Novbak said today that Russia opposed using an intermediary.

The EU has said it will make funds available to Ukraine within its financial assistance framework which can be used for gas payments. The European Commission, the bloc’s executive arm, said yesterday it had received a Ukrainian request for an additional loan of 2 billion euros ($2.5 billion).

Ukrainian Doubt

“Almost all issues that were discussed -- on the price, on supply terms and debt restructuring -- are agreed on,” Russia’s Novak said. The unresolved issues, which will be considered before the next round of talks on Oct. 29, are the amount of gas needed in November and December as well as resources to pay for that fuel upfront, he said. He estimated Ukraine will need $1.6 billion to pay for deliveries in the next two months.

“We have fulfilled our part,” Novak told reporters. “We hope that the European Commission, the EU, the European Union member states will also pay attention and take over a part of the appropriate aid.”

Serhiy Pereloma, Naftogaz’s first deputy chief executive, told a government meeting today in Kiev that Ukraine may cut gas consumption by 6.7 billion cubic meters this heating season. Prime Minister Arseniy Yatsenyuk told the same meeting that he’s unsure of the prospects for a Russian energy deal.

“I’m quite skeptical we can build relations with Russia but we’ll see how events develop on Oct. 29,” he said.

By Ewa Krukowska, Elena Mazneva and Daryna Krasnolutska