Russia's Gazprom announces further gas reductions to Ukraine

Business Materials 4 March 2008 15:27 (UTC +04:00)

(dpa) - Russian energy giant Gazprom announced further reductions of gas supplies to neighbouring Ukraine on Tuesday over an unresolved payment dispute.

The state-owned Russian natural gas monopolist said that as of 1700 GMT exports to Ukraine would be reduced by another 25 per cent.

The announcement comes a day after Gazprom reduced gas deliveries to Ukrainian natural gas distribution company Ukrtranzgaz by 25 per cent.

The Kremlin-controlled energy conglomerate has argued Ukraine owes as much as 1.5 billion dollars.

The gas conflict comes in spite of the declaration by presidents Vladimir Putin and Viktor Yushchenko on February 12 that the dispute had been resolved.

Ukrainian Prime Minister Yulia Tymoshenko on Sunday, only hours before the Gazprom volume reduction, claimed the debt had actually been paid in full.

The delivery reduction to Ukraine potentially could pare down gas supplies to European consumers, as Ukraine in previous conflicts with Gazprom has siphoned off gas destined to Europe for its own needs.

Some 80 per cent of Gazprom gas travels to the European Union via Ukrainian pipelines, providing Europe some 25 per cent of its gas needs.