Russia's natural gas giant OAO Gazprom yesterday threatened further gas cuts to Ukraine within hours unless an agreement was reached on a debt dispute and contracts for future deliveries.
Gazprom on Monday cut shipments to Ukraine by about a third and spokesman Sergei Kupriyanov said another 25 percent reduction would be imposed at 8pm yesterday unless an agreement was signed.
Much of the Russian gas consumed in Western Europe comes in pipelines that cross Ukraine and the dispute has raised concerns that supplies to the West might be reduced.
Kupriyanov yesterday repeated Gazprom's assurances that any shipments transiting Ukraine would not be affected. But a three-day Gazprom cutoff to Ukraine in 2006 resulted in a reduction of deliveries downstream.
Gazprom portrays the dispute as strictly commercial, but suspicions of a political agenda persist. Gazprom is controlled by the state and its chairman, Dmitry Medvedev, is Russia's president-elect.
Ukrainian President Viktor Yushchenko has persistently irritated the Kremlin with efforts to move out of Russia's sphere of influence and become more closely integrated with the West, including aiming to join NATO.
Gazprom last month threatened a reduction to Ukraine over a US$1.5 billion debt dispute, timed to coincide with Yushchenko's visit to Moscow. That cutoff was avoided by a last-minute agreement made between Yushchenko and Russian President Vladimir Putin.
But documents formalizing that agreement have not been signed by Ukraine's natural gas company Naftogaz.
"In connection with the lack of progress in talks, the lack of Naftogaz signing contracts for the purchase of gas, including for the amount already delivered in January and February, a decision has been reached to cut gas deliveries for Ukraine by another 25 percent beginning at 20:00," Kupriyanov told reporters.
There was no immediate comment from Naftogaz on why the contracts had not been signed. But the delay appeared likely to be connected with disputes over the use of middleman companies in the Russia-Ukraine gas trade.
Most of Ukraine's imported gas originates in Turkmenistan and Kazakhstan, but is shipped in pipelines belonging to Gazprom. Both the Central Asian gas and the Russian-origin gas is purchased from RosUkrEnergo, an intermediary company half-owned by Gazprom and half by two Ukrainian businessmen. The gas in turn is sold to UkrGazEnergo -- jointly owned by Naftogaz and RosUkrEnergo -- which then supplies Naftogaz.
Critics say the laborious arrangement is essentially a mechanism for siphoning money into private pockets. Ukrainian Prime Minister Yulia Tymoshenko has called for direct dealings with Gazprom.
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