Gazprom Neft (SIBN.RS) and a delegation from Ukraine's state gas company began talks on Tuesday in a bid to agree on a new contract for pumping Russian gas to Ukraine, the Russian energy group said.
"The talks are underway," Gazprom spokesman Sergei Kupriyanov told AFP, adding that the Ukrainian delegation had arrived in Moscow.
Gazprom warned Saturday it would cut off gas deliveries to Ukraine on Jan. 1 unless a new contract is signed, in a move that would risk a repeat of the interruptions to gas supplies to Europe in 2006.
Gazprom has insisted that a new contract for gas deliveries to Ukraine can only be signed after the issue of Ukraine's gas debts is resolved.
Russia says Naftogaz owes Gazprom $2.4 billion and although Kiev disputes the amount, the Ukrainian gas firm has vowed to pay its debts to resolve the matter.
Gazprom has said that the price Ukraine pays for gas could increase to $400 per 1,000 cubic meters from the current level of $179.5. Ukraine has said payments had been held up by the global economic crisis.