According to UNIAN (via AFP in Moscow - no link) Russia cancelled scheduled talks with Ukraine in light of the agreement reached by Ukraine with the EU to upgrade its gas distribution system. President Medvedev and Prime Minister Putin - in a now familiar double-team announcement, basically told the EU that Ukraine and its gas (which flows to Europe) is their responsibility. Putin ill-disguised threat of 'reviewing' Russia's relationship with the EU unless they are included in discussing this turn of events is also now becoming very familiar. Of course, the South Stream pipeline project has nothing to do with this and Russia also respects the independence of its neighbors.
What remains to be seen is whether the EU actually can fund the rehabilitation of the pipelines and, more importantly, whether the Germans and French are willing to provide this type of development aid in the face of Russian threats. Russia has a window of opportunity really flex its energy muscle - and events like this clearly upset the Kremlin. If the EU doesn't follow through and Vice President Biden's rejection of spheres of influence is ignored by the 'reset button' - Ukraine can look forward to a lot less maneuvering room with its resurgent neighbor.
I'm off to Moscow at the end of May and will get some additional views on the on-going issues between Russia's near-abroad and Russia. By that time, of course, President Yuschenko will be in the process of being impeached.