Russia Halts Gas Supplies To Kiev

_75546838_75545812Ukraine says Russia has cut off all gas supplies to Kiev, in a major escalation of a dispute between the two nations.

“Gas supplies to Ukraine have been reduced to zero,” Ukrainian Energy Minister Yuri Prodan said.

Russia’s state-owned gas giant Gazprom said Ukraine had to pay upfront for its gas supplies, after Kiev failed to settle its huge debt.

Gazprom had sought from Kiev $1.95bn (£1.15bn) – out of $4.5bn it says it is owed.

The Russian firm said it would continue to supply gas to Europe.

Russia-Ukraine ties remain tense since Moscow annexed Crimea in February.

Kiev says Moscow backs separatists in the east of the country. Russia denies the charge.

“Today, from 10:00 Moscow time, Gazprom, according to the existing contract, moved Naftogaz to prepayment for gas supplies,” Gazprom said in a statement yesterday morning.

“From today, the Ukrainian company will receive Russian natural gas only in the amounts it has paid for.”

Ukraine’s energy minister Yuri Prodan speaks to the media after talks with Gazprom officials in Kiev – 14 June 2014 Ukraine’s energy minister Yuri Prodan had hoped to secure a new discounted gas rate from Gazprom.

Moments later, both Gazprom and Ukraine’s state-owned Naftogaz company filed lawsuits against each other in the Stockholm arbitration institute.

Gazprom said it wanted to recover $4.5bn from Naftogaz, which is dealing with gas supplies to Ukraine. Meanwhile, Naftogaz said it was seeking to recover $6bn in “overpayment” for gas since 2010.

Russian Prime Minister Dmitry Medvedev said Ukraine’s position on the issue “smacks of blackmail”.

The latest moves follow crisis talks between Ukraine, Russia and the European Union on the issue.

“We reached no agreement. The chances that we meet again are slim,” Gazprom spokesman Sergei Kuprianov said after the latest round of the talks ended in Kiev over the weekend.

However, EU Energy Commissioner Guenther Oettinger, who attended the talks, said he was “not pessimistic” about a deal.

He said he would continue to work for an agreement despite his compromise proposal, that Kiev pay $1bn yesterday and the rest in instalments, being rejected by Gazprom.

Mr Oettinger later added that Ukraine intended to fill its gas transit commitments to the EU and he was also confident that Russia would meet its gas supply pledges to Europe.

Ukraine’s discounted rate for gas was axed in April after Moscow accused Kiev of failing to pays its bills. — BBC


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