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Ukraine's Naftogaz halts siphoning of Gazprom gas

MOSCOW, July 18 (RIA Novosti) - The Ukrainian oil and gas company Naftogaz has stopped tapping Russian gas in excess of a standing contract with Gazprom, the Russian energy giant said on Friday.

It said the Ukrainian company had complied with Gazprom's demand to stay within the contract-mandated quotas for 2008.

Naftogaz declined to comment on Gazprom's demand.

"No comment. Wait until Monday," spokesman Valentyn Zemlyanskiy said.

Naftogaz's debt to monopoly exporter RosUkrEnergo, 50% owned by Gazprom, is more than $2 billion, the gas trader earlier said.

Naftogaz and Gazprom signed a contract in March setting the price for Central Asian gas supplies to Ukraine for 2008 at $179.5 per 1,000 cu m for volumes of 49.8 billion cu m.

The price for the natural gas Russia sells to Ukraine, and the transit cost levied by Ukraine on Russian gas pumped to the European Union, have proved a major source of contention since Gazprom began hiking prices to the country in 2005 after years of subsidized supplies.

Ukraine, which transits about 80% of Russia's Europe-bound gas, threatened to start tapping fuel after Russia halved shipments to the country amid a dispute over Kiev's gas debt and supply scheme earlier this year.

In late February, Ukraine paid over $1 billion to Russian energy giant Gazprom to clear its debt for 2007 supplies.

The countries agreed in March to simplify the system by getting rid of the Ukrainian UkrGazEnergo trader, owned by Naftogaz and Gazprom, but Russia insisted that RosUkrEnergo continue to be involved in the gas supply chain.

In early June it was reported that RosUkrEnergo had filed a lawsuit with the Stockholm Arbitration Court against Naftogaz, worth $55 million in fines for untimely 2006 gas supply payments.

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