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Ukraine halts Russian gas imports over price dispute

AFP/File | A gas storage site in Lviv, Ukraine, pictured on May 28.

Kiev suspended natural gas imports from Russia on Wednesday after talks to agree on third-quarter pricing collapsed a day earlier, Ukraine's transport monopoly Ukrtransgaz said. Russian supplies to Europe via Ukraine were unaffected.

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“From today, Ukraine is not getting gas from Russia. Transit supplies are as normal,” Ukrtransgaz spokesman Maksim Belyavsky said.

Russia had proposed keeping prices unchanged from the second quarter at $247 per 1,000 cubic metres with a discount of around $40 per 1,000 cubic metres. Ukraine asked for a $100 discount.

Russian Energy Minister Alexander Novak insisted that the discount that Kiev is asking for is "unjustified" and would put the cost of supplying Ukraine below the market rate.

Ukrainian state energy firm Naftogaz said after Tuesday’s failed talks that it would stop buying gas from Russia until new terms had been agreed. Energy Minister Volodymyr Demchyshyn said Ukraine would buy gas from other sources and there would be another round of talks with Russia in September.

Gazprom CEO Alexei Miller confirmed that Russia halted supplies at 10am (7am GMT) after Ukraine failed to make an advance payment for July's delivery.

"Gazprom is not going to send gas to Ukraine at any price without the advance payment," Miller said in comments carried by Russian news agencies.

Gazprom accounts for around a third of Europe’s gas needs and roughly a half is pumped via pipelines crossing Ukraine. Moscow and Kiev regularly dispute supply terms and rows have led to disruptions in supplies to Europe in previous years.

Exports to Europe were unaffected during last year’s row but Russia has warned that gas storage in Ukraine needs another 7 billion cubic metres to ensure the pressure needed to get gas to Europe in the winter.

On June 30 Ukraine received 22.9 million cubic metres of gas from Slovakia, 11.0 million from Russia and 2.7 million from Hungary. Ukraine expects to receive another 13.6 million cubic metres of gas from Slovakia on Wednesday, Belyavsky said.

Ukraine, whose relations with Russia are at an ebb following Moscow’s annexation of Crimea and its backing of Ukrainian separatists, began large imports of gas from Europe in 2013 in a bid to reduce its energy dependence on Russian supplies.

(FRANCE 24 with AFP and AP)

 

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