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Ukraine's Tymoshenko to EU: Row with Russia won't cut gas supplies

Business Materials 5 March 2008 14:57 (UTC +04:00)

( dpa ) - Ukrainian Prime Minister Yulia Tymoshenko on Wednesday promised a row between her government and Russian natural gas monopolist Gazprom would not affect energy supplies to the Europe Union.

" Ukraine is a reliable partner," Tymoshenko told the Interfax news agency. "We will meet our responsibilities for the transport and export of gas to EU nations."

Gazprom since Monday reduced volumes of gas for the Ukrainian market by 75 per cent, as a pressure tactic to force Ukraine to pay up a gas bill estimated by the Russian company to be 600 million dollars.

Tymoshenko's administration has conceded it owes Gazprom, but says the sum is substantially less, because of money allegedly owned by Gazprom to Ukraine for transporting gas to downstream customers in Europe, among other fees.

Ukrainian President Viktor Yushchenko, technically Tymoshenko's boss, on Wednesday repeated demands Tymoshenko return to the negotiating table with Gazprom "and resolve the dispute immediately." Tymoshenko has ignored similar instructions in the past.

Ukraine will in the face of the Gazprom reductions supply Ukrainian consumers from its own reserves, and leave gas volumes destined for Europe untouched, officials from Tymoshenko's administration said on Tuesday.

Naftohaz Ukrainy, Ukraine's natural gas distributor, on Wednesday appeared to up the ante in its ongoing battle of nerves with Gazprom, announcing it was reducing its estimate of natural gas left in domestic reserves from one month to two weeks.

Were Ukraine's "energy security to be threatened," Ukraine could be forced to make up gas shortages by "diverting" gas en route to European customers, to Ukrainian consumers, according to a Tuesday Naftohaz Ukrainy statement.

Gazprom supplies roughly one-third of Europe's natural gas needs. An estimated 80 per cent of that flow travels to market via Ukrainian pipelines, giving Kiev leverage over Gazprom's single largest source of income.

A Gazprom total cut off of gas supplies to Ukraine in late 2005 led to a reduction of gas volumes to Europe and price spikes as far away as France, after the Ukrainians began siphoning gas destined for Europe.

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