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27 Feb, 2008 06:10

Ukraine's indecision risks another gas cut

Gazprom says it will cut natural gas deliveries to Ukraine by 25% on March 3, unless outstanding disputes are settled. The key issue is a debt, owed for the supply of gas last year. The announcement came on Tuesday from Gazprom's headquarters.

Ukrainian leaders visted Moscow this month to try to settle the issues ranging from the debt, to the formation of a new company to import gas into Ukraine.

Gazprom insisted Ukraine should settle the debt and sign an agreement outlining the two countries' responsibilities in the gas sector.

Meanwhile Ukraine continues to consume Russian gas – at the moment almost 2 billion cubic metres of Russian gas have been sent to Ukraine.

Coal assets to merge

Gazprom is also closing in on the deal with Russia's biggest coal producer SUEK.

The two firms are to merge their electric power and coal assets into a joint venture, in a deal thought to be worth about $US 16 billions.

Gazprom will acquire 50% plus one share in the coal giant, using shares of generating companies.

The deal is to unite the assets of two major companies, providing an optimized fuel balance at power plants and the effective development of our electricity and coal assets. If approved, it will be finalised by September this year.