Ukraine says to pay on time for Russian gas

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KIEV (Reuters) - Ukrainian state energy firm Naftogaz will pay for Russian gas on time, Energy Minister Yuri Prodan said on Wednesday after Moscow raised doubts whether bills would be settled and called on the European Union to lend Kiev money.

Rows between Kiev and Moscow over gas bills and prices led to winter supply cuts in January that affected hundreds of thousands of Europeans. The EU receives about 20 percent of its gas from Russia travelling in pipelines through Ukraine.

Financially ailing Natfogaz has this year paid every bill on time but with the help of state funding. Questions arose whether this could continue after the International Monetary Fund delayed releasing bailout funds to Ukraine.

"Of course we will be paying on time. At the moment Naftogaz is putting together the resources to pay up for gas by the deadlines foreseen in the contract," Prodan told reporters.

He said the October bill, which must be settled by November 7, amounted to $460 million (278 million pound) and that Naftogaz had various financial resources including "its domestic activities and also domestic bonds" that could be sold to the central bank.

Russian Prime Minister Vladimir Putin has said Ukrainian President Viktor Yushchenko risked a new gas crisis by obstructing the work between the central bank and the government. Yushchenko's office and the central bank deny this.

(Reporting by Natalya Zinets; writing by Sabina Zawadzki; Editing by Toby Chopra)

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