Russia cuts natural gas supply to Ukraine

March 3rd, 2008 - 6:28 pm ICT by admin  

Moscow/Kiev, March 3 (DPA) Russian energy giant Gazprom said it reduced gas supplies to Ukraine Monday because of a payment dispute. The Russian natural gas monopoly informed the Ukrainian natural gas distribution company Ukrtranzgaz by telephone that the taps were turned down as of 0930 GMT.

The delivery reduction to Ukraine by 25 per cent potentially could cut down gas supplies to European consumers, as Ukraine in previous conflicts with Gazprom has siphoned off gas destined to Europe for its own needs.

“We are doing this for the protection of our interests,” said Gazprom spokesman Sergei Kuprianov at a Moscow press conference.

There were no early reports of changes in flow volumes at Ukraine’s western border. Some 80 per cent of Gazprom gas travels to the European Union via Ukrainian pipelines.

Gas supplies for Europe were continuing “in full volume,” Kuprianov said.

Gazprom and the Ukrainian government are at odds over an outstanding debt for natural gas used by Kiev from November to the present time.

The Kremlin-controlled energy conglomerate has argued Ukraine owes as much as $1.5 billion.

Ukrainian Prime Minister Yulia Tymoshenko Sunday, only hours before the Gazprom volume reduction, claimed the debt had actually been paid in full.

Resolution of the dispute is complicated by Tymoshenko’s effort to remove from the payment loop a pair of middleman companies holding distribution rights for delivery of Russian gas to Ukraine.

Tymoshenko has claimed both firms artificially inflate the price of gas sold to Ukraine. Talks between the two firms and the Ukrainian government on payments, particularly over what money has and has not been forwarded to Gazprom, have been bogged down for months.

A late 2005 row between Gazprom and Ukraine over gas pricing led to a 48-hour reduction in gas volumes to Europe, causing retail price spikes as far away as France.

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