Gazprom to decrease Ukraine gas deliveries

If Ukraine doesn’t pay more than US$1.3 billion (EUR920 million) in debt this month JSC Gazprom said will decrease supplies to the country.

The threat raised the specter of a renewed dispute between Russia and Ukraine that could potentially affect European supplies, and came amid uncertainty over the results of tense parliamentary elections in Ukraine.

State-controlled Gazprom said it had informed European clients about the matter on Tuesday. In a statement, the company said that Ukraine has taken no action despite repeated requests and warned that "if the debt is not settled in October, Gazprom will be forced to begin decreasing deliveries of natural gas for consumers in Ukraine."

The announcement triggered memories of a pricing dispute that saw gas supplies to the EU drop briefly in early 2006 after Gazprom halted direct shipments to Ukraine.

While Tuesday's warning referred specifically to cuts in supplies for Ukrainian users, during the previous dispute Gazprom accused Ukraine of siphoning gas, leading to the decreased supplies further west in Europe.

Gazprom supplies a quarter of the gas used by Europe, and the incident drove home Europe's dependence on Russia for energy.