Feb 26, 2015 10:53 AM

Russia could cut off gas to Ukraine by 'end of week'

The Associated Press

MOSCOW (AP) Russia could cut off supplies to neighboring Ukraine by the end of the week if it does not get further payments from the country, state-owned gas company Gazprom said Thursday.

Spokesman Sergei Kupriyanov said in televised remarks that "if no new funds are received from Kiev, then naturally we cannot continue delivering gas to Ukraine." He did not specify the sum.

Despite the threat, Russian and Ukrainian energy ministers are set to meet in Brussels on Monday, making an immediate cutoff unlikely.

Following a bruising dispute over prices and debt that raised fears of supply disruptions in Europe, Russia and Ukraine signed a deal in October requiring Kiev to pay in advance for gas shipments. Ukraine is struggling financially, however, and has recent agreed on a new international bailout package it has yet to tap.

The European Union has stepped in to help settle the dispute. "We are inviting the parties here to hear their views and then try to mediate a settlement," said Anna-Kaisa Itkonen, European Commission spokeswoman.

Kupriyanov said that discussions with Ukraine's gas company, Naftogaz, were ongoing, but gave no other details.

Gazprom's ultimatum came a day after Russian President Vladimir Putin's announcement that Ukraine's latest payment would only be good for "another three to four days." Putin warned that Russia would turn off the tap if Ukraine fails to remit payment quickly, but did not set a concrete deadline for the halting of deliveries.

It is unclear whether Ukraine, which is on the brink of bankruptcy as a protracted fight against Russia-backed separatists in the east continues to erode the country's economy, is capable of paying.

The International Monetary Fund agreed this month to give Ukraine a new bailout deal worth 15.5 billion euro ($17.5 billion). The pledge of new funding came as a previous aid package to Ukraine, which had already received $4.6 billion last year, ran into trouble.

The latest gas dispute erupted last week after Ukraine cut gas supplies to areas in the east controlled by Russia-backed rebels, and Russia began pumping gas directly to the east, saying they should be counted as part of the overall volume of its gas exports.

Gazprom argued that pumping gas through entry points in eastern Ukraine is in line with the contract, while Ukraine protested that, arguing it can't manage gas distribution in areas outside its control.

Putin on Wednesday angrily denounced Ukraine's decision to halt gas supplies to eastern regions, home to 4.5 million people, saying it "smacks of genocide."

"If the Ukrainian authorities consider it part of their territory, they should be fully responsible for the situation there," he said. "And if it's not so, they should openly say that."

Kupriyanov said that for now, Russia was willing to "set aside" the issue of whether gas delivered to rebel-held territory in eastern Ukraine should be considered a part of Ukraine's gas bill.


Raf Casert in Brussels contributed to this report.


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