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7 Mar, 2014 14:24

Ukraine misses gas payment deadline, risks halt on supplies - Gazprom

Ukraine has missed its payment deadline for gas supplies. As its debt is increasing, Gazprom does not rule out it may cut gas supplies to the country, the Russian energy giant’s head Aleksey Miller has said.

“Today, March 7, is the deadline for making a payment for the February gas supplies to Ukraine,” Miller told journalists on Friday, adding that Gazprom has not received payment on account.

“Given the discount for the first quarter the outstanding debt has increased to $1.89 billion,” Miller added.

“Factually it means that Ukraine has stopped paying for gas. This contravenes the contract terms and international trade practice.But we can’t deliver gas for free”.

If Ukraine doesn’t pay its bills it risks plunging into a crisis similar to the one in 2009, Miller warned.

During the transit crisis five years ago supplies of Russian gas to Europe were cut off for 20 days because of the tension between Russia and Ukraine.

Earlier this week President Putin said that starting from April 1 Gazprom would no longer offer Ukraine the lower price agreed in December. The aid package to Kiev included $15 billion in bonds purchases and a 33 percent gas discount, that reduced the price to $268.50 per 1,000 cubic meters down from $400.

Currently Ukraine buys more than 50 percent of its gas from Russia, but aims to become energy independent by 2020. Before the protest kicked off in Ukraine, the country signed a $10 billion shale gas exploration deal with Chevron.