Ukrainian President Viktor Yushchenko said Tuesday Ukraine could return gas now stored in underground reservoirs to Russian energy giant OAO Gazprom (GAZP.RS) as part of a debt repayment.
"Either we pay for the gas we have stocked or we change the owner of the gas," he told a press conference.
Russia has warned that gas deliveries to Ukrainian state gas group Naftogaz could be cut if an outstanding debt to Gazprom of up to $2.4 billion wasn't paid.
Such action could in turn disrupt gas supplies to Europe, as Ukraine is a major transit country for Russian gas bound for European markets.
Ukraine has stocked large volumes of Russian gas ahead of an expected surge in demand in the winter. A senior Ukrainian official on Monday estimated that 16 billion cubic meters have been stored.
Yushchenko said part of Ukraine's gas debt had already been settled by drawing on hard currency reserves held by the Ukrainian National Bank, known as BNU.
In addition to the possible return of gas held in storage to Gazprom as reimbursement, parts of the debt would also be restructured, he said.
"We agreed that for some of the debt we would use BNU reserves," of which about $800 million has been paid to Gazprom, he said.
"A portion of the debt will be restructured" over several months, according to Yushchenko, to allow Ukrainian consumers to pay for the gas they use in January and February.
But Gazprom denied that there had been a restructuring agreement.
"There has never been an accord on restructuring the debt in the context of bilateral relations and no document has been signed in this regard," Gazprom said in a report carried by the Ria Novosti news agency.