Tuesday, June 17, 2014

Crisis: Russia threatens to cut off gas to Ukraine

The impact of gas cuts would not initially be huge because it is summer and Ukraine has gas in storage [Reuters]

State-owned Gazprom refuses to extend deadline for Kiev to pay off gas debt after EU-brokered talks end without deal.. Ukraine faces the threat of Russia cutting off gas supplies when a 06:00 GMT deadline passes on Monday after talks on a long-running gas pricing dispute failed.

Russian natural gas producer Gazprom said it was not extending the deadline for Ukraine to start paying off its gas debts after the discussions ended in the early hours of the morning in Kiev, raising the prospect of disruptions to gas flows to the European Union via Ukraine.

The breakdown of the talks is likely to increase political tensions that have mounted in the past few days between Kiev and Moscow as Ukrainian government forces clashed heavily with pro-Russian separatists in east Ukraine.

Reuters news agency reported that the latest in several rounds of talks ended at around 1:30am (22:30 GMT) despite a last-minute attempt by the EU's energy commission to secure a compromise.
Moscow says Ukraine has a total of more than $4bn in gas debts and wants almost half that sum paid by 06:00 GMT.

"The Russian side is expecting payment of the accumulated gas debt of $1.951bn before 10am [06:00 GMT] on June 16," Gazprom spokesman Sergei Kupriyanov said.
"If the funds are not paid, gas supplies will, as was announced earlier, be switched to a pre-payment system

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