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Ukraine may cut Europe gas supply Russia deepens Ukraine gas cuts
(39 minutes later)
Ukraine has said it may restrict Russian gas supplies to Europe if gas monopoly Gazprom goes ahead with further cuts in Ukrainian supply. Russian gas monopoly Gazprom has cut supplies of gas to Ukraine again, and said further cuts may follow in the wake of a dispute over debts.
State-owned Gazprom said it would cut supplies of gas to Ukraine by a further 25% on Tuesday, but said shipments to Europe would be unaffected. State-owned Gazprom cut supplies by a further 25% on Tuesday, following a 25% cut a day earlier - thereby cutting supplies by half.
A large proportion of the gas Russia sells to Europe passes through pipelines in Ukraine. Prior to the news, the EU called for an emergency internal meeting amid fears the row could hit European supplies.
The dispute began after Russia said Ukraine had not paid its debts. Much of the gas Russia sells to Europe passes through pipelines in Ukraine.
Gazprom said it reduced supplies to Ukraine by 25% on Monday after talks broke down last week. "If the Ukrainian side does not return to the negotiating table, I do not exclude a further reduction in supplies," Sergei Kupriyanov, a Gazprom spokesman, said on state television.
The dispute started after Russia said Ukraine had not paid its debts, which Gazprom says totals $1.5bn (£770m).
Escalating crisisEscalating crisis
Gazprom said it reduced supplies to Ukraine by 25% on Monday after talks broke down last week.
Monday's cut effectively ended supplies of gas directly from Russia, which make up a quarter of Ukraine's imports. The rest of Ukraine's imports comes from other states but travels through Russian pipelines.Monday's cut effectively ended supplies of gas directly from Russia, which make up a quarter of Ukraine's imports. The rest of Ukraine's imports comes from other states but travels through Russian pipelines.
The crisis escalated on Tuesday after Gazprom announced a second cut.
They [Gazprom] reassured us that gas supplies to the European Union will not be affected European Commission spokesperson Michele CerconeThey [Gazprom] reassured us that gas supplies to the European Union will not be affected European Commission spokesperson Michele Cercone
Naftogaz, Ukraine's state gas company, said reserved the right to take "appropriate" action - and disrupt supplies to Europe that transit Ukraine - if Gazprom carried out the threatened additional cut. Naftogaz, Ukraine's state gas company, said it reserved the right to take "appropriate" action - and disrupt supplies to Europe that transit Ukraine - if Gazprom carried out the threatened additional cut.
"In the event that Gazprom continues blatantly to violate technical agreements between the two countries by reducing volumes of Central Asian gas to Ukraine, Naftogaz reserves the right to introduce appropriate, asymmetrical actions to defend the interests of Ukrainian consumers," the company said."In the event that Gazprom continues blatantly to violate technical agreements between the two countries by reducing volumes of Central Asian gas to Ukraine, Naftogaz reserves the right to introduce appropriate, asymmetrical actions to defend the interests of Ukrainian consumers," the company said.
Gazprom claims the outstanding debt is $1.5bn (£770m) and called on Ukraine to return to the negotiating table.
"Twenty four hours have passed since Gazprom reduced supplies by a quarter, however the Ukrainian side has not resumed negotiations and the head of Naftogaz did not arrive in Moscow," Gazprom spokesman Sergei Kupriyanov said.
Russia's President-elect Dmitry Medvedev - the head of Gazprom - told Ukraine's President Victor Yushchenko on Tuesday afternoon that he expected Ukraine to do more to resolve the dispute, according to Medvedev's secretariat and the Interfax news agency.Russia's President-elect Dmitry Medvedev - the head of Gazprom - told Ukraine's President Victor Yushchenko on Tuesday afternoon that he expected Ukraine to do more to resolve the dispute, according to Medvedev's secretariat and the Interfax news agency.
But Ukraine maintains the payments have already been made.But Ukraine maintains the payments have already been made.
European fearsEuropean fears
Mr Kupriyanov had reassured European gas users on Tuesday that shipments of Russian gas would continue. Gazprom spokesman Sergei Kupriyanov reassured European gas users on Tuesday that shipments of Russian gas would continue.
Kiev's energy relationship with Russia is the one that matters, and that just seems to be getting worse Dominic Laurie, Europe business correspondentKiev's energy relationship with Russia is the one that matters, and that just seems to be getting worse Dominic Laurie, Europe business correspondent
"Export deliveries via Ukrainian territory are carried out in full volume," he said."Export deliveries via Ukrainian territory are carried out in full volume," he said.
European Commission spokesman Michele Cercone added: "They [Gazprom] reassured us that gas supplies to the European Union will not be affected.European Commission spokesman Michele Cercone added: "They [Gazprom] reassured us that gas supplies to the European Union will not be affected.
"The Commission is concerned about the apparent reductions and urges both parties to go ahead in negotiations and quickly find a definitive solution to this commercial issue.""The Commission is concerned about the apparent reductions and urges both parties to go ahead in negotiations and quickly find a definitive solution to this commercial issue."
A National Grid spokesperson said the UK did not rely on pipelines crossing Ukraine for its gas. "The UK doesn't get any of its gas direct from Russia," he said.A National Grid spokesperson said the UK did not rely on pipelines crossing Ukraine for its gas. "The UK doesn't get any of its gas direct from Russia," he said.
A previous row between the two sides saw Russia cut gas to Ukraine in 2006. It also hit exports to Western Europe and affected diplomatic relations between Brussels and Moscow .The BBC's Europe business correspondent Dominic Laurie says since that last crisis, a lot of work has been done to improve the relationship. Kiev tension
"Top officials meet often, and there's now an early warning system with Gazprom that alerts Brussels about dips in supplies at the Russian end", he said. A previous row between the two sides saw Russia cut gas to Ukraine in 2006. It also hit exports to Western Europe and affected diplomatic relations between Brussels and Moscow.
The BBC's Europe business correspondent Dominic Laurie says since that last crisis, a lot of work has been done to improve the relationship.
"Top officials meet often, and there's now an early warning system with Gazprom that alerts Brussels about dips in supplies at the Russian end," he said.
"The trouble is, the problems aren't there - but further west - in Ukraine. Kiev's energy relationship with Russia is the one that matters, and that just seems to be getting worse.""The trouble is, the problems aren't there - but further west - in Ukraine. Kiev's energy relationship with Russia is the one that matters, and that just seems to be getting worse."