Ukraine warns of 'gas war' as Russia cuts supplies

( AFP )- Russia on Monday sharply reduced gas supplies to neighbouring Ukraine in a debt dispute, prompting Ukrainian President Viktor Yushchenko to warn of a possible new "gas war" with Moscow.

The European Union, which relies heavily on Russian natural gas piped through Ukraine, urged the two sides to find an agreement in a row reminiscent of a 2006 stand-off that led to disruptions in EU gas supplies.

Russian state-run gas monopoly Gazprom said it was forced to cut gas supplies by 25 percent after Ukraine failed to pay a 600-million dollar (395-million euro) debt, and that EU supplies would not be affected.

The dispute came as officials announced that Dmitry Medvedev, chairman of Gazprom and a defender of the company's hardball negotiating tactics, had won Russia's presidential election on Sunday with a huge majority.

Ukrainian state oil and gas monopoly Naftogaz meanwhile promised not to divert gas bound for Europe to make up for the shortfall and said it would instead make use of gas from underground reserves.

Naftogaz spokesman Valentin Zemlyansky told AFP Ukraine's reserves were enough to last a month and added that a Ukrainian delegation would again visit Moscow to try to resolve the dispute.

Ukrainian politicians meanwhile accused Russia of putting undue pressure on Kiev's pro-Western leadership, which has sought to wrest Ukraine from Moscow's sphere of influence by pressing for NATO and EU membership.

At a meeting in Kiev, Yushchenko told Ukraine's Prime Minister Yulia Tymoshenko of the need for "dynamic negotiations" with Gazprom that would avoid "the provocation of a gas war" with Russia, the president's office said.

In a statement released shortly after a Monday morning deadline expired, Gazprom said it had reduced gas supplies to Ukrainian consumers by 25 percent "to ensure its economic interests."

Gazprom said it remained open to further talks, adding: "Deliveries to European consumers are continuing and will continue at full capacity."

A Naftogaz spokeswoman later said Gazprom had warned Ukrainian authorities that supplies would be reduced by a total of 35 percent. Gazprom officials could not be reached to confirm this further reduction.

Monday's cut comes despite a February 12 announcement by Yushchenko and Russian President Vladimir Putin that the debt dispute had been resolved after talks in the Kremlin.

The two presidents discussed that agreement and the current problem in a telephone conversation initiated by Kiev Monday, Interfax news agency reported.

Russian natural gas accounts for around a quarter of Ukraine's gas imports, with the rest coming from former Soviet republics in Central Asia via pipelines that go through Russia.

The European Union also relies on Russia for a quarter of its gas imports.

Pro-Western Ukrainian politicians said the current dispute with Russia had nothing to do with business and was part of a wider political struggle between the two ex-Soviet neighbours.

"The game of ultimatums for Ukraine continues," Ivan Kirilenko, head of the Yulia Tymoshenko Bloc in Ukraine's parliament, told Interfax news agency.

Vyacheslav Kirilenko, head of the parliamentary fraction of Yushchenko's Our Ukraine, told Interfax: "This is simply pressure on Ukraine."

Russian officials have defended Gazprom saying it is acting according to market principles in purely business-related disputes. Medvedev last month said Russia's gas was not "a freebie that comes in pretty plastic pipes."