Admitting that the ongoing gas standoff with Ukraine has damaged his country's image as a reliable supplier to Europe, Russian Prime Minister Vladimir Putin has said a solution to the crisis was in sight.
Admitting that the ongoing gas standoff with Ukraine has damaged his country's image as a reliable 
supplier to Europe, Russian Prime Minister Vladimir Putin has said a solution to the crisis was in sight.
"We seem to be close to interesting agreements that may resolve the crisis," Putin told a news conference with German Chancellor Angela Merkel after a meeting in Berlin Friday.
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Putin met the heads of leading European energy companies, forming a consortium to share the financial risks of providing Ukraine with the technical gas it says is needed to pump exports through its pipelines.
Russian Deputy Prime Minister Igor Sechin said Friday that Russian energy giant Gazprom, Germany's E.ON, Ruhrgas and Wingas, France's Gaz de France and Italy's Eni have agreed to join the consortium and more firms could soon follow suit.
Putin said the technical gas would cost USD730 million for the first three months of 2009, noting that Ukraine had asked for 360 million cubic meters of technical gas in January, 600 million in February and 600 million in March.
The Russian leader also called Ukraine an irresponsible transit nation, accusing it of stealing the 140 million cubic metre of gas that was to be permanently in the pipelines.
He also said the European Union (EU) bore a share of the responsibility for Kiev's behaviour. "The EU's position actually means support for Ukraine, which has violated its transit obligations," Putin said.
He said Russia could no longer tolerate Ukraine blocking gas transit while holding out for free or cut-price gas and letting the EU pressure Russia to resume deliveries.
Speaking at the news conference, Merkel urged an end to the dispute, saying some countries in the Balkans were especially hard hit by energy shortfalls in freezing temperatures, and pledged further EU involvement.
"We are entitled to gas supplies even in the absence of a bilateral deal (between Russia and Ukraine), but in reality the deal is necessary, and the EU will do everything to encourage talks," the chancellor said.
Merkel and Putin said they had agreed to form an international expert group to inspect the technical condition of Ukraine's gas transportation network.
Putin's visit came as Europe has stepped up pressure.
European Commission spokesman Johannes Laitenberger said earlier on Friday "the meetings in coming days offer the last and best chance for Russia and Ukraine to demonstrate they are serious about resolving this dispute."
DPA adds: Putin admitted that his country has suffered severe damage to its image in the ongoing gas standoff with Ukraine.
"Large damages have been sustained, politically and economically," Putin told a group of German editors in Dresden after talks with Merkel in Berlin.
Putin is due to meet with his Ukrainian counterpart Yulia Tymoshenko in Moscow on Saturday to discuss the situation, which has affected 18 EU countries.
Russia suspended supplies to Ukraine Jan 1 after the former Soviet neighbors failed to agree on debt and prices for 2009. A week later, Gazprom cut off shipments to the EU, accusing Kiev of stealing gas intended for EU consumers. Ukraine has denied the accusation.
An EU-brokered deal signed on Monday to have transits restarted without a bilateral contract with Ukraine has not been enough to resume deliveries, even though international monitors were deployed to ensure gas would not be siphoned off.
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