Russian gas export monopoly Gazprom demanded Ukraine pay an overdue gas bill "urgently" (Photo: Reuters)
Russia and Egypt are discussing a free trade zone that could see the North African state importing Russian liquifeid gas Reuters

Russia has reacted to the threat of increased Western sanctions by resuming talks with Egypt about creating a free trade zone.

Russia and the West are currently embroiled in the biggest stand-off since the Cold War. Following Russia's annexation of the Crimea region, Washington and Brussels have responded by imposing asset freezes and travel bans on a number of individuals and a bank with close ties to the Kremlin.

The free trade project has been on hold since 2011, when Egypt's President Hosni Mubarak was overthrown at the height of the Arab Spring. The country has endured three years of political and economic uncertainty since then.

While the talks have resumed, the free trade zone will not be implemented until the Egyptian presidential elections later in the year. The country is yet to announce a date for the ballot, but the former army chief Abdel-Fattah al-Sisi is widely expected to win.

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"There were talks about this [creation of the free trade zone with Egypt] before 2011. ... Now we have agreed to resume these negotiations and to discuss sectors of cooperation," Russian Agriculture Minister Nikolai Fydorov said.

"The final decision will be made after the election campaign in Egypt, official documents will be appearing after it," he told reporters in Moscow.

The prospective free trade area would include Egypt, along with the customs union of Russia, Belarus and Kazakhstan.

As well as the free trade proposal, Fydorov said that officials at the Russian-Egyptian commission for trade development had discussed a number of joint projects.

The talks focused on energy, including Russian supplies of liquefied gas, a possible nuclear deal and other commodities.

Trade between the two countries has expanded in recent years. Egypt is currently the largest importer of Russian wheat, taking 20% of Russian exports in 2013/14.

Egyptian Industry and Investment Minister Mounir Fakhry Abdel-Nour said that co-operation between Egypt and Russia would continue to increase.

"You have expressed your wish to expand exports, primarily of wheat ... and we want to develop exports of vegetables and fruit. It would help widen our cooperation," Abdel-Nour told the meeting.