Europe Fears Cuts In Natural Gas From RussiaRussian, Ukrainian and EU leadership meet tomorrow with the goal of finalizing a natural gas supply agreement as cold winter weather looms. Russia suspended gas shipments to Ukraine in June due to disagreements over price going forward and over $5 billion of unpaid bills for gas already delivered. Ukraine’s state gas company faces financial challenges as it seeks to repay its debt and potentially prepay some of next year’s supply.

It appears some combination of EU and IMF loans will be used to settle the score and get the gas flowing again, at least temporarily, but the outcome of tomorrow’s negotiations remains far from certain. Even if a temporary agreement is signed tomorrow, gas transit to Europe via Ukraine could still be disrupted at some point given frosty relations between Moscow and Kiev and Russia’s often unpredictable negotiating tactics.

“But the deal will not ensure safe gas transit to Europe through Ukraine’s territory. Moscow may still find a reason to close the valve shut,” Mikhail Korchemkin, director of U.S.-based consultancy East European Gas Analysis told the Moscow Times