Gazprom says no payments from Ukraine as Monday deadline looms

by Reuters
Monday, 7 April 2014 15:28 GMT

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* Ukraine gas debt stands at $2.2 billion

MOSCOW, April 7 (Reuters) - Ukraine has made no payments to Gazprom despite a midnight (2000 GMT) deadline to reduce its $2.2 billion debt for natural gas supplies, the Russian gas producer said on Monday.

The Ukrainian government says Russia has increased the gas price for Kiev for political reasons in a crisis over Moscow's annexation of Crimea that has fuelled East-West tensions.

A Gazprom spokesman declined to say what action, if any, the company would take if Kiev did not meet the deadline - which falls on the seventh day of each month - for settling its monthly bill.

"There have been zero payments from Ukraine," he said.

Ukraine has missed deadlines in the past without punishment but Gazprom has suggested it might ask Kiev to pay in advance for gas if it does not meet the monthly deadline.

Gazprom cut off gas supplies to Ukraine in price disputes in the winters of 2005/2006 and 2008/2009, actions which also disrupted supplies of Russian gas to Europe carried via Ukraine.

Gazprom last week increased the gas price for Ukraine by 80 percent, to $485 per 1,000 cubic metres while it charges European clients $370-$380.

The move increases a squeeze on Ukraine's economy and puts more pressure on the Kiev government following Russia's annexation of the Crimea region from Ukraine during the most serious East-West rift since the end of the Cold War in 1991.

Ukrainian Prime Minister Arseny Yatseniuk said last week that the increase was unacceptable and warned that he expected Russia to step up pressure by limiting supplies to Ukraine.

Russia meets 30 percent of Europe's total gas demand, while a half of gas from Russia to the European Union goes via Ukraine.

Russian gas supplies to the EU and Turkey hit an all-time high of 162 billion cubic metres last year, while first-quarter exports edged up 2.4 percent as European customers have rushed to buy gas from Gazprom in anticipation of possible cuts.

Analysts have said the crisis could drag on for some time, probably until next winter. (Reporting by Vladimir Soldatkin; editing by Jason Neely)

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