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Writethru: Russia Cuts Down Gas Supply to Ukraine

Posted on: Monday, 2 January 2006, 09:00 CST

Writethru: Russia cuts down gas supply to Ukraine

MOSCOW, Jan. 1 (Xinhua) -- Russian gas giant Gazprom cut down natural gas supply to Ukraine on Sunday after Kiev rejected Russia's demand to more than quadruple the price.

Gazprom began lowering pressure in the pipelines to Ukraine at 9:40 a.m. (0640 GMT) and cut down gas exports to Ukraine by 120 million cubic meters a day, Gazprom spokesman Sergei Kupriyanov was quoted by the Itar-Tass news agency as saying.

But Russia continues to supply 360 million cubic meters a day to Europe via the Ukrainian territory.

"Gas exports to Europe is proceeding at full volume," Kupriyanov said.

Ukraine's national oil and gas company Naftogaz Ukrainy confirmed that pressure in the national gas pipeline was going down.

The cutback capped a bitter months-long dispute between the two countries over the gas price.

Ukraine was buying Russian gas at 50 U.S. dollars per 1,000 cubic meters over the past year, but Gazprom has asked Ukraine to pay 230 U.S. dollars, saying the price increase was necessary to conform to world gas price levels.

Late Saturday, President Vladimir Putin approved a three-month freeze on the gas price for Ukraine, ordering Gazprom to supply gas at last year's price for the first quarter of 2006 if Ukraine accepts a price hike starting in the second quarter.

Gazprom said shortly after the mid-night deadline on the offer expired that Ukraine formally refused the offer.

"After a meeting with the Russian president, Gazprom's chairman sent a signed contract for gas supply and transit in 2006 to Ukraine's oil and gas company Naftogaz Ukrainy," Kupriyanov said. "The official word from Ukraine was they can not sign it."

On Sunday, the Russian Foreign Ministry accused Ukraine of deliberately blocking progress in negotiations on gas deliveries.

"Our impression is that the Ukrainian authorities do not feel confident and have decided to deliberately disrupt the negotiating process with Russia," the ministry said.

At the same time, Russia sought to calm the Europeans over a feared disruption of gas flow and urged Ukraine to observe its obligations in transiting gas for Europe.

"In a bid to bolster the energy security of Europe and economic cooperation on the continent as a whole, Russia will rigorously fulfill all of its agreements and contracts on natural gas delivery that Russia signed with EU partners and other European countries," the ministry said.

"We hope Ukraine will ... guarantee the uninterrupted transit of natural gas intended for EU countries via its territory," it said.

EU energy officials are set to convene an emergency session on Wednesday to discuss the gas supply situation of the 25-nation bloc.

Gazprom provides about half the gas consumed in the European Union (EU) and some 80 percent of that amount is sent through pipelines that cross Ukraine.

Source: Xinhua News Agency - CEIS

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