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Russia warns of new gas crisis with Ukraine

Russia and Ukraine may be close to a new gas crisis as Kiev faces difficulties making payments, an official accompanying Prime Minister Vladimir Putin to Kazakhstan has said.

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AFP - Russia and Ukraine may be close to a new gas crisis as Kiev faces difficulties making payments, an official accompanying Prime Minister Vladimir Putin to Kazakhstan was quoted as saying on Thursday.

"If things are that bad in the financial sphere ... We could conclude that we could be on the brink of a new gas crisis," news agencies quoted the official as saying, referring to Ukraine's poor economic situation.

Ukraine has been one of the countries worst-hit by the financial crisis and its energy giant Naftogaz has sharply reduced purchases of gas from Russia as a result.

According to the unnamed Russian official, Ukraine's Naftogaz does not have enough funds for the purchase of gas needed for its client's summer orders and its underground reserves are depleted.

He added that Russian gas export monopoly Gazprom had paid Ukraine in advance for the rest of 2009 for transit services Ukraine provides Russia for shipping gas to European neighbours.

"Naftogaz has already received pre-payment for gas transit for the whole of 2009," the official was quoted as saying.

Putin was expected to meet his Ukrainian counterpart Yulia Tymoshenko on the sidelines of a gathering of prime ministers of former Soviet states in Kazakhstan.

Close-door, crisis negotiations between the two premiers resulted in a new gas contract between the two countries that broke a January stand-off, in which supplies were cut for over a week to European clients further downstream.

Over 80 percent of gas pumped via Russia to Europe passes through Ukrainian pipelines.
 

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