Gazprom cuts gas supplies to Ukraine by 25% over debt row-2

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Gazprom cut natural gas supplies to Ukraine by 25% on Monday over a debt dispute, but pledged shipments to Europe would not be affected.
(Adds EU, Naftogaz, Yushchenko comment in paras 11-15)

MOSCOW, March 3 (RIA Novosti) - Gazprom cut natural gas supplies to Ukraine by 25% on Monday over a debt dispute, but pledged shipments to Europe would not be affected.

"Gazprom reduced supplies by 25% at 10 a.m. Moscow time (7 a.m. GMT)," Gazprom spokesman Sergei Kupriyanov said adding shipments to European consumers were continuing in full.

Ukraine's national oil and gas company Naftogaz confirmed that supplies had been cut by 30 million cubic meters a day. The country receives 135 million cu m of gas a day from Russia.

In late February, Russia's gas monopoly threatened to cut shipments on March 3 if Ukraine, a major transit country for Russian gas to Europe, failed to pay off the debt and approve a new scheme for future supplies.

"Gazprom is a reliable supplier, but it cannot deliver gas without payment," Kupriyanov said. "The debt for gas supplied to Ukraine has not been repaid as of today. Ukraine is continuing unauthorized gas consumption. New contracts have not been signed."

Kupriyanov said around 1.9 billion cu m of gas worth some $600 million had been illegally consumed by the ex-Soviet state.

Ukraine said earlier it had paid over $1 billion to Gazprom to clear its debts for Russian supplies in 2007. Kiev owed Russia a total of $1.5 billion in 2007 and 2008, according to the Russian giant.

Kupriyanov said the monopoly was prepared to continue talks with Ukraine to resolve the dispute.

Under an agreement reached between Presidents Vladimir Putin and Viktor Yushchenko on February 12, Gazprom and Naftogaz are to switch to direct cooperation without intermediaries and to set up two joint ventures to this end.

A bitter gas pricing row between the former Soviet allies led to supplies to Ukraine being briefly cut at the start of 2006. Supplies to Europe, which buys a quarter of its gas from Gazprom, were also affected.

The latest reports quoted a European Commission spokesman as saying that Gazprom had assured its European customers that natural gas supplies would not be affected despite gas cuts to Ukraine.

Michele Cercone, spokesperson of Jacques Barrot, Vice-President of the EC in charge of Transport, said the Commission's gas division could hold an emergency meeting if needed. He also urged Russia and Ukraine "to find a quick and definitive solution."

Naftogaz has also issued guarantees that Russian natural gas will be delivered to Europe in full.

At a meeting with Ukrainian Prime Minister Yulia Tymoshenko, Yushchenko warned against aggravating differences with Gazprom at talks over unpaid gas debts.

"The president emphasized that the main thing is having the most effective negotiating process to successfully complete gas talks, rather than provoking a 'gas war'," the presidential press service said.

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