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Gazprom cuts gas to Ukraine by 25%

Latest update : 2008-03-03

Russia's Gazprom reduced supplies to Ukraine by a quarter on Monday but said its exports to the Europe Union would not be affected. Ukraine, meanwhile, said the cut was not significant and would have no impact on consumers in Ukraine.

Russia on Monday cut gas supplies to Ukraine by 25 percent after talks in a pricing dispute failed, but supplies to Europe will not be affected, Russian gas monopoly Gazprom said.

"To ensure its economic interests, Gazprom from 10:00 am (0700 GMT) today reduced gas supplies to Ukrainian consumers by 25 percent," spokesman Sergei Kupriyanov was quoted as saying in a statement.

"Deliveries to European consumers are continuing and will continue at full capacity," he said. Ukraine is the main transit route for Russian gas supplies to the European Union.

The dispute echoes an earlier one in 2006 in which Russia briefly cut supplies to Ukraine, leading to knock-on disruption in several European countries.

In dispute are 1.9 billion cubic metres of gas deliveries worth about 600 million dollars (395 million euros) that Ukraine has not paid, Kupriyanov said.

"Unregulated use of gas continues in Ukraine. The necessary contracts have still not been signed," Kupriyanov said, while insisting Gazprom remained open to further talks.

The cut comes despite an announcement on February 12 by the presidents of the two ex-Soviet neighbours, Vladimir Putin and Viktor Yushchenko, that the differences had been resolved.

Kiev claims to have settled its debts to Gazprom for 2007, but disagreements remain over a debt Moscow says Ukraine accumulated in recent months when Russia used its own gas to make up for a shortfall in less expensive Central Asian gas.

Russian natural gas accounts for around a quarter of Ukraine's gas imports, with the rest coming from former Soviet republics in Central Asia via pipelines that go through Russia.

The dispute partly reflects wrangling between Yushchenko and Ukraine's Prime Minister Yulia Tymoshenko, who has been pushing for an end to the murky system of intermediaries by which Ukraine pays for gas imported from Russia and Central Asia.

Date created : 2008-03-03