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. Last Updated: 07/27/2016

Ukraine Close to Gas Sector Reform Deal

BRUSSELS — Ukraine is close to agreeing to gas sector reforms that international lenders have demanded before they can extend loans to help prevent a cut in Russian gas supplies to Europe, a European Commission spokesman said Friday.

The talks are intended to help Naftogaz Ukrainy pay its debts and prevent a repeat of a gas crisis.

“Good progress was made,” spokesman Mark Gray said following talks in Kiev among the commission, Ukrainian authorities and lenders, including the International Monetary Fund.

Ukraine is seeking as much as $4 billion, partly to buy gas for storage ahead of the winter so that it can keep pace with soaring European demand.

Banks have refused to lend money until Naftogaz ends years of subsidizing household gas supplies and finds ways to force companies to pay their bills.

“The parties are close to agreement regarding the necessary short- and medium-term commitments by the Ukrainian authorities on reform … which would make it possible for the international financial institutions to prepare a package of support,” Gray said. “This would be designed to address both payment difficulties for the storage of Russian gas … as well as reform and modernization of the gas sector,” he said.