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Russia cuts Ukraine's natural gas supply

Posted on: Thursday, 1 January 2009, 07:06 CST

Russian energy giant Gazprom cut off Ukraine's natural gas supply Thursday when talks about a 2009 energy contract failed, the company said.

In a statement, Gazprom said, Gas deliveries in the Ukraine direction were reduced by 90 million cubic meters per day, the equivalent of a day's supply of gas for the country, The New York Times reported.

Russian Prime Minister Vladimir Putin warned Ukraine of serious consequences, if the country siphoned off any of the remaining supply in the pipeline that travels through Ukraine to Western Europe.

Gazprom is insisting Ukraine pay $600 million in late fees to complete payment on its gas bill.

Ukraine President Viktor Yushchenko said the bill had been settled after Ukraine transferred $1.5 billion to Swiss gas trader RosUkrEnergo.

The pipeline makes Western Europe innocent bystanders in the dispute between the two former Soviet Union bloc countries. About 80 percent of Russia's Western Europe natural gas deliveries travel through the pipeline.

In 2006, Russian cut off Ukraine's supply for three days, leading to shortages as far away as Italy, as Ukraine diverted gas from the pipeline to meet internal demand, the Times said.

This year, Ukraine said it had three month's supply on hand.

Source: United Press International

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