- The Washington Times - Wednesday, December 31, 2008

MOSCOW (AP) — Russia’s state gas monopoly, Gazprom, said Wednesday that Ukraine has threatened to seize gas intended for European customers if no deal is reached on gas shipments to Ukraine starting Jan. 1.

Gazprom’s deputy chairman Alexander Medvedev said Ukraine’s statement amounted to “blackmail” of Russia and the European Union. Gazprom warned it would cut supplies Thursday if Ukraine fails to pay off all its debt and sign a deal for next year’s deliveries by midnight.

Medvedev condemned the threat, which came in a letter from Ukraine’s state gas company, Naftogaz, as “utterly irresponsible,” saying it violated Ukraine’s obligations under a previous contract.

The threat could raise fears of disruptions in supplies to Europe similar to those that occurred during a similar dispute in January 2006. The announcement came as Russian and Ukrainian officials remained locked in tough talks on Ukraine’s debt for past gas shipments and payment for future deliveries.

See related story: Ukraine settles Russian import debts

Gazprom supplies a quarter of the gas used by EU nations, and about 80 percent of it goes through Ukraine.

France, which holds the rotating EU presidency through the end of Wednesday, urged Ukraine and Russia “to respect their international engagements as a transit country and producer of gas destined for the European Union.”

French Foreign Ministry spokesman Romain Nadal told an online briefing, “We hope that the commercial dispute between Ukraine and Russia is settled through negotiations.”

Ukraine’s Naftogaz spokesman Valentyn Zemlyansky and other Ukrainian officials refused to comment, but Medvedev showed a copy of the letter from Naftogas chief Oleh Dubina at a news conference Wednesday.

Medvedev said Gazprom has a contract with Naftogaz for transit of Russian gas delivered to Western Europe valid until Dec. 31, 2010, and it is unrelated to the supply deal.

Ukraine’s Prime Minister Yulia Tymoshenko was scheduled to travel to Moscow for gas talks Wednesday evening but abruptly canceled her trip. Tymoshenko’s spokeswoman Marina Soroka said Naftogaz officials remained in Moscow and expressed hope a deal could still be reached.

Gazprom CEO Alexei Miller criticized Ukraine’s stance in the talks as “unconstructive” and warned that Ukraine faces a cutoff of supplies at 10 a.m. Moscow time (0700 GMT) Thursday if it fails to sign a contract for next year deliveries by midnight. Gazprom said Ukraine must pay off $2.1 billion debt for Russian gas supplies and accept a much higher gas price for next year to sign the deal.

Ukraine’s Naftogaz has said it paid $1.5 billion to settle its debt for Russian gas imports. Medvedev said that the sum has reached the accounts of Rosukrenergo, a Russian-Ukrainian intermediary based in Switzerland, and voiced hope Gazprom would soon receive the money.

But Gazprom’s spokesman Sergei Kupriyanov said Ukraine needs to make good on the rest of its debt. Fines owed by Ukraine for accumulating the debt account for the remainder.

Kupriyanov said that Gazprom and Naftogas officials are continuing talks on a contract for next year’s deliveries. Ukraine, crippled by a financial crisis, has resisted a move by Gazprom to more than double next year’s price for gas to $418 per 1,000 cubic meters.

Kupriyanov said he estimated the chances of reaching the deal at just one in three.

Associated Press writer Maria Danilova contributed to this report from Kiev, Ukraine.

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