Ukraine Says Gazprom May Cut All Gas Flows to Europe

By Kateryna Choursina and Daryna Krasnolutska

Jan. 6 (Bloomberg) -- OAO Gazprom, Russia’s gas-export monopoly, reduced deliveries to Europe via Ukraine by more than 75 percent and may cut supplies “completely,” said Oleh Dubina, the chief executive officer at Ukraine’s state energy company.

Gazprom cut daily supplies destined for Europe at 3 a.m. today, the Kiev-based NAK Naftogaz Ukrainy said in an e-mailed statement. Russia reduced deliveries to 92 million cubic meters of gas as of 6 a.m. and cut it further to 73.8 million at 10 a.m. in Kiev, compared with 314.6 million yesterday, according to Naftogaz.

“There were no warnings from the Russian side on cutting deliveries,” Dubina said today at a press conference in Kiev. “They probably decided to stop deliveries to Europe via Ukraine completely.”

Russia supplies a quarter of Europe’s gas, 80 percent of which is shipped through Ukraine. It’s locked in a dispute with Ukraine over supply and pricing, which prompted Gazprom to cut off deliveries to its western neighbor on Jan. 1. Both sides blame each other for today’s supply cuts. A similar conflict interrupted supplies to Europe in 2006.

Gazprom Deputy Chief Executive Officer Alexander Medvedev told reporters in London today that it was a unilateral decision by Ukraine to shut down three gas export pipelines and that the Russian exporter is a “hostage” to Ukraine’s “irresponsible behavior.”

Gas-Siphoning Accusation

Alexei Miller, Gazprom’s chief executive officer, told Russian Prime Minister Vladimir Putin yesterday that the company intends to reduce gas deliveries to the Ukrainian border by 65.3 million cubic meters a day to 221.8 million cubic meters, equivalent to the amount it says Ukraine has taken out of the system. Ukraine denies siphoning the fuel, saying some is needed to keep pipelines operating.

“Russian accusation of Ukraine’s stealing the gas is groundless,” said Fuel and Energy Minister Yuriy Prodan today at the same press conference.

Russian supplies to Turkey, Bulgaria, Greece, Croatia, Romania and Macedonia were halted at the Ukrainian-Romanian border today, while deliveries to Austria, Italy, the Czech Republic and Bosnia declined.

Ukraine urged the European Union to mediate talks with Russia, Dubina said. The EU has said the reduction of Russian gas supplies to some of its member countries is “completely unacceptable.”

Medvedev said Russia supplied about 225 million cubic meters of gas to the Ukrainian border yesterday and tried to supply the same quantity today though only 40 million cubic meters was able to reach European customers.

To contact the reporter on this story: Daryna Krasnolutska in Kiev at dkrasnolutsk@bloomberg.netKateryna Choursina in Kiev kchoursina@bloomberg.net