Gazprom announces further gas reductions to Ukraine

Russian energy giant Gazprom announced further reductions of gas supplies to neighbouring Ukraine on Tuesday over an unresolved payment dispute.

Gazprom announces further gas reductions to Ukraine
The state-owned Russian natural gas monopolist said that as of 1700 GMT exports to Ukraine would be reduced by another 25 per cent.

The announcement came a day after Gazprom reduced gas deliveries to Ukrainian natural gas distribution company Ukrtranzgaz by 25 per cent.

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

The Ukrainian gas company Naftohazy Ukrainy called on Gazprom to return to talks, before the cut back affected supplies to Europe.

"At this point we cannot rule out a reduction in volumes moving westward," a Naftohaz statement read in part.

The gas conflict has escalated in spite of the declaration by presidents Vladimir Putin and Viktor Yushchenko on February 12 that the dispute had been resolved.

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

Gazprom and Ukraine have been arguing for months on the size of the Ukraine's gas bill - a wrangle complicated by differing opinions on the per unit price Ukraine should pay for fuel, how much Gazprom should pay to ship it to Europe via Ukrainian pipelines, and whether or not payments made by Ukraine to middleman companies count as payments to Gazprom.

Gazprom and Naftohaz Ukrainy officials on Tuesday traded new accusations that, among other charges, their counterparts are refusing to forward billing information, and so blocking an early resolution of the crisis.

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

Ukraine's government on Monday said it would cover gas shortfall from internal reserves, but left open the possibility of a reduction of gas volumes for Europe.

Some 80 per cent of Gazprom gas travels to the European Union via Ukrainian pipelines, providing Europe some 25 per cent of its gas needs.

A similar gas cut off by Gazprom in late 2005 over a price dispute reduced volumes of fuel delivered to Europe for two days, and forced price spikes as far away as France.

Agencies
Last Mod: 04 Mart 2008, 17:56
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