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4 Mar, 2008 16:51

Ukraine refuses to rule out EU gas cuts

Gazprom has cut supplies to Ukraine to half of the normal rate, but has insisted it's continuing its deliveries to European customers in full. Ukraine's gas company Naftogaz promised not to divert gas meant for Europe for at least two weeks, although it d

Concerns grow in Europe
Medvedev contacts Ukrainian President
Gas row background

Russia's gas monopoly also threatened Ukraine with further cuts in a row over unpaid gas debts.

Gazprom spokesman Sergey Kupriyanov is highly critical of Kiev's handling of the dispute.

“Our Ukrainian colleagues did not come to Moscow; the only answer from them was that Naftogaz Ukraine may start unsanctioned siphoning of gas from volumes designated for European customers. That's why deliveries to Ukrainian customers as promised have now been cut by a further 25%,” Kupriyanov said.

As of Tuesday evening, Ukraine is receiving only 75 million cubic metres of gas, half the usual daily volume.

Naftogaz says it is ready to return to the negotiating table and has already lodged its proposals with Gazprom.

Concerns grow in Europe

So far, there are no reports from Europe of shortfalls in deliveries. Much of the gas that Western Europe buys from Russia comes from pipelines that cross Ukraine.

The European Commission is growing concerned about the possibility of disruption and is urging Moscow and Kiev to find a solution quickly.

William Ramsay, Deputy Executive Director at the International Energy Agency, says cutting supplies is not the way to solve the row.

“What we are saying is there are gas contracts between European consumers and Russia, and it’s important for Russia and Ukraine to keep their commercial disputes out of the pipes of the downstream customers,” Ramsay told RT.

To guarantee the security of gas transit to Europe, Gazprom has invited independent observers to monitoring stations on Ukrainian territory. However some of them were refused entry.

The European Commission said it may call an urgent gas coordination group meeting to be held over Gazprom's latest dispute with Ukraine.

Medvedev contacts Ukrainian President

On Tuesday, Russia's President-elect and Chairman of Gazprom, Dmitry Medvedev, was in contact with Ukraine's President Viktor Yushchenko.

It's reported he asked the Ukrainian President to step up efforts to resolve the unpaid debt which is worth around $US 600 million.

Gas row background

Three weeks ago it seemed the dispute had been settled. Vladimir Putin and Viktor Yushchenko agreed to replace thecontroversial gas trading companies that act as middlemen between the two countries, with a new joint venture of Gazprom and Naftogaz. But that doesn’t suit Ukrainian Prime Minister Yulia Timoshenko who is lobbying for the direct purchase of gas from Gazprom.

Analysts say Timoshenko’s proposal would not mean cheaper gas for Ukraine, and say she is using the issue to gain points ahead of the presidential election.