Reform would solve Ukraine's gas troubles-US envoy

* Envoy says companies holding back from Ukraine investment

* Projects are lined up

BRUSSELS, Nov 18 (Reuters) - Ukraine could rid itself of all its problems with paying for gas imports if undertakes reforms to improve the investment climate there, the U.S. envoy to the region said on Wednesday.

"It's not too late, but they need to take the steps," Richard Morningstar, U.S. special envoy for Eurasian energy, told an EU policy briefing in Brussels.

"I've spoken to companies that say they have projects lined up to develop gas production in Ukraine, but they're not going to go there because it's such a difficult investment climate."

Russian gas supplies to Europe via Ukraine -- a route that supplies a fifth of Europe's gas -- were halted for more than two weeks in January due to a quarrel between Moscow and Kiev.

Concerns are growing that the dispute could be repeated this January, when Ukraine holds presidential elections. Ukrainian Prime Minister Yulia Tymoshenko said the country had struggled to pay its latest monthly gas bill to Russia.

"The tragedy of Ukraine is that in the last 15 years they had the opportunity to be totally energy independent," said Morningstar.