Russia may stop gas supply to western Europe

December 27th, 2008 - 12:30 pm ICT by IANS  

Moscow, Dec 27 (DPA) Russian gas export monopoly Gazprom has said its dispute with Ukraine over payments could cause disruptions in deliveries to Western Europe, a news agency reported.Gazprom spokesman Sergei Kupriyanov said that the head of the Russian gas behemoth Alexei Miller had notified Europe’s largest clients that it could not rule out the possibility of a cut off, according to Itar-Tass.

At issue is the lack of progress in reaching agreement with Ukraine’s Naftogaz over $2 billion in non-payments for imports by Kiev, with a New Year’s deadline looming with threatened cut-offs by Gazprom.

Gazprom supplies about one-quarter of the European Union’s gas needs, 80 percent of which is shipped through Ukraine.

In its letter, Gazprom said it doubted it could uphold its obligations to deliver gas to western Europe without resolution of the disagreements with Naftogaz. But Gazprom pledged to do all it could to resolve the dispute.

In a similar dispute in 2006, Russia blamed Kiev for siphoning off gas to European customers - sparking fuel shortages and a price spike as far as Paris.

Gazprom claims Ukraine has paid only $800 million in arrears of its total debt, and analysts say the country’s crushing economic problems make reimbursing of more of the debt difficult.

Ukraine has asked for a $16.4-billion loan from the International Monetary Fund(IMF), but IMF conditions mean the fund cannot be directly used to pay for Russian gas arrears.

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