"Deliveries to Ukraine were cut in full at 10:00 a.m. on January 1. The volume of the reduction is 90 million cubic meters. Gas transits to Europe are continuing at a volume of 300 million cu m per day," Gazprom said.
A source at Ukraine's state company Naftogaz confirmed that gas supplies had been cut. "We have noticed a reduction in pressure," the source said.
Gazprom said on Wednesday that Ukraine's Naftogaz had threatened in a letter addressed to the energy giant, that it could start confiscating Russian gas meant for European consumers after January 1, if no new contract is agreed for 2009.
Russia's Vesti-24 television channel said, however, that a pumping station in Slovakia near the Ukrainian border had not reported any reduction in the amount of Russian gas being pumped to Europe.
The station said it would be clear within a couple of hours if Ukraine was carrying out its threat.
Ukraine transits about 80% of Russia's gas to European consumers.
In 2006 a similar gas dispute between the two former Soviet states resulted in a brief cut to supplies to Ukraine. When shortages were reported in some Eastern European countries, Russia accused Ukraine of siphoning off Europe-bound gas.