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    Russia's Gazprom may halt gas supplies to Ukraine over debt

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    Gazprom may halt natural gas supplies to Ukraine from the start of next year over the country's failure to repay a more than $2 billion gas debt, a spokesman for the Russian energy giant said on Thursday.

    MOSCOW, December 18 (RIA Novosti) - Gazprom may halt natural gas supplies to Ukraine from the start of next year over the country's failure to repay a more than $2 billion gas debt, a spokesman for the Russian energy giant said on Thursday.

    "If the debt is not repaid... and no other solutions other than debt repayment in cash are found, then, naturally, we will not be able to sign a new contract," Sergei Kupriyanov said. "This means we will have no legal grounds to supply gas to Ukraine starting from January 1."

    Kupriyanov said Gazprom would inform its European partners on Thursday of possible problems with natural gas supplies via Ukraine over the country's outstanding debt.

    "The current situation will be outlined and the inherent risks assessed in a letter that will be sent to partner companies today on behalf of the chief executive," Kupriyanov told a news conference.

    He said Gazprom was taking action after learning that Ukraine did not plan to pay off its gas debt before the end of the year.

    Ukraine's national oil and gas company denied refusing to pay off the debt this year.

    "We planned [to pay back the debt], and we are trying to find out what has happened," Naftogaz press secretary Valentyn Zemlyanskiy said.

    Ukraine's president, Viktor Yushchenko, said earlier on Thursday the country had already paid $800 million of its debt to Russia for natural gas supplies, and would pay another $200 million soon.

    The European Commission expressed concern on Thursday over the lack of progress in gas talks between Russia and Ukraine, and urged the parties to settle the gas debt issue.

    European consumers have followed with concern gas disputes between the former Soviet neighbors since 2006, when a bitter gas pricing row resulted in supply shortfalls in Europe. Ukraine transits 80% of Russia's Europe-bound gas.

    Ukraine also faces an increase in Russian gas prices. The two countries have agreed to gradually switch to European-level prices. Ukraine currently pays $179.5 per 1,000 cubic meters for gas imported from Russia and hopes to pay no more than $240 next year. Gazprom said earlier it could raise the price to over $400.

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