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Gazprom refuses to restart gas supplies to Ukraine

3 min

Kiev (AFP)

New tensions between Moscow and Kiev flared Thursday after Russia's Gazprom said it will not restart gas supplies to Ukraine and Naftogaz accused its counterpart of violating contractual agreements.

The March shipments would have become the first Russian supplies to Ukraine since November 2015 when Kiev ceased purchasing Russian gas in favour of Europe.

Since a popular uprising ousted a Kremlin-backed regime in Ukraine in 2014, the two gas companies have been locked in a furious legal battle that led them to lodge multi-billion dollar claims against each other in the Stockholm arbitration court.

In December last year, the court lowered the price Russia can claim for its gas, but also required Kiev to buy 5 billion cubic metres of Russian gas annually from 2018.

On Thursday, Gazprom said supplies would not be restarted because an additional agreement to the current contract had not been finalised.

"Obviously, no gas deliveries will be made to Naftogaz Ukraine from March 1," Gazprom deputy head Alexander Medvedev said in a statement.

He added that the Russian gas giant had returned the prepayment that Naftogaz had made for March supplies.

In response, Naftogaz accused Gazprom of violating its contractual obligations.

"Gazprom's position surprises us," Naftogaz chief Andriy Kobolev said in a statement.

"We are buying gas because we are implementing a court decision," he said, adding that Naftogaz intended to claim damages from the Russian company.

The European Commission said it is "ready to act as an honest broker" in mediating another gas conflict between Moscow and Kiev.

Gazprom's unexpected decision coincided with freezing temperatures all over Ukraine.

Record high gas consumption led to a shortage of gas in the amount of about 10 million cubic meters per day.

Andriy Kobolev suggested restricting usage of gas for four days from Saturday.

The new flare-up in tensions came after the Stockholm arbitration court ordered Gazprom to pay $2.56 billion to Naftogaz for "failure to deliver the agreed transit gas volumes", the Ukranian company said on Wednesday.

Ukrainian President Petro Poroshenko has ordered seeking the seizure of Gazprom's assets, particularly in Europe, if Gazprom fails to pay the money as it was decided by the court.

Gazprom covers about one third of the European continent's gas needs, a share that has increased in recent years despite the European Union's intention to reduce its dependence on Russian gas supplies.

After the 2014 popular uprising, Moscow annexed the peninsula of Crimea from Ukraine and supported an anti-Kiev insurgency in the east of the ex-Soviet country.

More than 10,000 people have been killed in the fighting since April 2014.

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