MOSCOW, Russia -- Russian gas giant Gazprom warned Thursday that it had no obligation to deliver gas to Ukraine from January 1 if Kiev failed to pay its debts, raising the spectre of cuts to downstream customers in Europe.

A gas pressure-gauge and the valve of the main gas-pipe outside Kiev. Russian gas giant Gazprom warned Thursday that it had no obligation to deliver gas to Ukraine from January 1 if Kiev failed to pay its debts, raising the spectre of cuts to downstream customers in Europe.

"If the debt is not reimbursed by January 1 and if other solutions are not found, we cannot sign a new contract and we will have no legal basis to supply gas to Ukrainian consumers," Gazprom spokesman Sergei Kupriyanov said.

Kupriyanov did not explicitly say that Gazprom would cut off gas to Ukraine if the debt remained unpaid. But his comments represented a clear warning of the consequences if the debt were not cleared.

Ukrainian President Viktor Yushchenko said in Kiev that 800 million dollars' worth of debt had been repaid to Gazprom on Wednesday, promising that an additional 200 million dollars would be paid in the near future.

"We must not have debts," the Interfax news agency quoted him as saying at a briefing.

Kupriyanov confirmed that Ukraine had paid 800 million dollars (544 million euros) of its debt to Gazprom but said this left an outstanding sum of roughly two billion dollars which he did not expect Kiev to pay soon.

"The other piece of news is that they are they are not going to pay more before the New Year. In other words they have paid back the debt for October, but not for November and December.

"We are not going to see this sum before the New Year and if they do not propose any timetable for repayment, the problem of January 1 is going to be aggravated.

"It is evident that we cannot go onto a new contract while leaving behind a debt of two billion dollars," he told reporters at a news conference broadcast live on state television.

Gazprom maintains that Ukraine's state gas company Naftogaz owes it 2.4 billion dollars (1.8 billion euros) and Russian officials have warned of steep price rises or delivery cuts if the outstanding debt is not cleared.

Meanwhile a Ukrainian delegation left for London to discuss the dispute with European Energy Commissioner Andris Piebalgs, officials in Kiev said.

The delegation -- consisting of Naftogaz chief Oleg Dubina, one of his deputies and a representative of Yushchenko -- will "carry out consultations in the context of regulating" the dispute, the presidency said in a statement.

They are to meet with Piebalgs, who is currently in London, a source close to the delegation told AFP under condition of anonymity.

"Efforts are being undertaken to ensure the timely payment of bills for November and December," the presidency's statement said, before taking a dig at Yushchenko's political archrival, Prime Minister Yulia Tymoshenko.

"Today the president's actions aim to settle the problems provoked by the systemic mistakes and inaction of the head of government," Yushchenko's top official for energy, Bogdan Sokolovsky, said in the statement.

Ukrainian Energy Minister Yuri Prodan denied that Ukraine was going to stop paying off its debts, saying that it would continue to negotiate with Gazprom.

The two sides are also at odds over fines imposed by Gazprom on Ukraine for late payment. The method of payment is also an issue as Naftogaz currently pays through an intermediary.

The new contract is a crucial issue as Gazprom wants to gradually increase the price Ukraine pays for gas to bring it closer to the price paid by European Union countries.

Ukraine currently pays Russia 179.5 dollars for 1,000 cubic metres of gas, less than half what some EU countries pay. A sharp rise would cripple Ukraine's economy, already ravaged by the global financial crisis.

Analysts have warned that any cut in supplies could have knock-on effects elsewhere in Europe, as Ukraine is a major transit country for Russian gas exports to the EU.

An earlier dispute between Russia and Ukraine over gas prices led to a brief interruption of gas supplies in several European countries in January 2006.

Source: AFP

Comments

Why "independent" Ukraine needs Russian gas, I wonder? Buy gas from USA or EU, they'll probably supply it for free.
XP said…
Yes….Ukraine is independent and a thorn on Putin’s ass….
Moscow can’t stand it and will do anything to try and choke the life out of this country…
But you know, it won’t …….even in the worst of times, Ukrainians are strong and will find a way to keep Moscow at a distance……..Ukrainians have already experience what it is to not live under the Russians iron hands…..
They depend on Russia for gas just like many European countries do as well…..
Please….don’t waste your time with your ignorant responses…
Get educated before you open your mouth …..
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