Gazprom May Cut Gas Exports to Ukraine on January 1

By Greg Walters and Lucian Kim

Dec. 18 (Bloomberg) -- OAO Gazprom, Russia’s natural-gas exporter, threatened to halt supplies to Ukraine on Jan. 1 should the country fail to pay debts for November and December sales.

The company has received $800 million from Ukraine, along with notification that no more will be paid before the end of the year for supplies in November and December, Gazprom spokesman Sergei Kupriyanov told reporters in Moscow today.

NAK Naftogaz Ukrainy denied it told either Gazprom or gas trader RosUkrEnergo AG that it would cease to make payments this year after transferring $800 million, according to an e-mailed statement from Ukraine’s state-run energy company today. Naftogaz confirmed a statement from President Viktor Yushchenko that the country would transfer $200 million more “in the near future.”

Ukraine will “make efforts” to pay for gas received in November and December, Yushchenko said earlier, without giving a timeframe.

Ukraine still owes more than $2 billion, Gazprom Deputy Chief Executive Officer Alexander Medvedev said.

Gazprom, which provides about a quarter of Europe’s gas, reduced deliveries to Ukraine in January 2006 during a pricing dispute, causing supplies across the European Union to fall. About four-fifths of Russia’s gas exports to Europe pass through Ukraine.

The Moscow-based company plans to send a letter to its foreign business partners today warning of gas-transportation risks related to Ukraine.

To contact the reporter on this story: Greg Walters in Moscow at gwalters1@bloomberg.net