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Russia could cut gas supplies if Ukraine fails to pay - Putin

RIA Novosti

05/03/2009 17:08 MOSCOW, March 5 (RIA Novosti) - Russia may have to cut off natural gas supplies to Ukraine, and via Ukraine to Europe, if Kiev fails to pay in full for gas delivered in February, Prime Minister Vladimir Putin said on Thursday.

"If the armed raids and arrests of officials [in Ukraine] result in the country's failure to pay for energy supplies, this could lead to a cutoff in deliveries for Ukrainian consumers, and possibly for consumers in Europe," Putin said.

The premier's comments follow Wednesday's raid of the head office of Ukrainian energy company Naftogaz by the country's Security Service, controlled by Ukrainian President Viktor Yushchenko.

Security Service officers were reportedly demanding the original copies of the company's January gas deal with Russia's Gazprom, following accusations that the company had illegally diverted large volumes of gas bought from Russia. Ukrainian Prime Minister Yulia Tymoshenko, who oversees Naftogaz, fiercely criticized the raid, saying it was aimed at disrupting payments and causing panic.

Putin said Russia was extremely concerned over the situation regarding Naftogaz.

"In view of reports on the actions of Ukrainian security services in relation to Ukraine's Naftogaz and its officials, including the intention to seize gas on the territory of Ukraine, we cannot but express our extreme concern over the possible consequences of these actions," Putin said.

Russian energy giant Gazprom suspended gas deliveries to Ukraine on January 1 over non-payments and the two sides' failure to agree a delivery contract for 2009. A week later, Gazprom accused Ukraine of stealing gas intended for EU consumers and cut off gas deliveries to the European Union via the country, prompting two weeks of major gas shortages across Eastern Europe.

The standoff was resolved after negotiations between the Russian and Ukrainian premiers. The gas supply and transit contract signed on January 19 by Gazprom and Naftogaz stipulates that the Russian energy giant can switch to 100% prepayments if payments are not received on time.

Gazprom said on Thursday it had received $310 million from Ukraine's Naftogaz as payment for natural gas supplied in February.

"Gazprom has received $310 million from Naftogaz of Ukraine as payment of gas supplies in February. The Ukrainian side still needs to pay another $50 million," Gazprom said.


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