In Ukraine dispute, Russia cuts gas supplies to Europe

Europeans suddenly saw gas supplies shrink Tuesday as Russia raised the stakes in its gas war with Ukraine by slashing deliveries through the main export pipeline.

Several European countries, including Bulgaria, Turkey, Greece, and Macedonia reported a complete cutoff of Russian gas as a result of the escalating row, while others, such as Austria and the Czech Republic, said their deliveries have slowed significantly.

Both Ukraine and Russia have been vying for European sympathy in the annual dispute, now in its sixth day, but the looming prospect of serious shortages – which have not occurred in previous Moscow-Kiev gas rows – is deepening concerns.

Gazprom demands that Ukraine pay an overdue bill of $600 million and accept a global market price of $418 per thousand cubic meters of gas for 2009. It began reducing pressure in the pipeline on Jan. 1, but cut it sharply on Tuesday in response to what it called systematic Ukrainian "theft" of Russian gas destined for European markets.

"We propose to reduce deliveries across the Russian-Ukrainian border by the same volume that has been stolen from Russia – 65.3 cubic meters, and in future, cut volumes by the amount of gas stolen each day," Gazprom CEO Alexei Miller was shown on Russian state TV telling Russian Prime Minister Vladimir Putin Tuesday.

Mr. Putin responded: "Good, I agree. Cut it today."

Ukraine's state gas company Naftogaz, which is responsible for maintaining the Soviet-era pipeline that carries 80 percent of Russia's gas exports to the West, has denied any illegal siphoning and says the line pressure was disrupted by Gazprom's shutdown, which began Jan. 1.

"For your information, Ukraine consumes only the gas it produces itself and gas pumped into Ukrainian storage facilities, which has been paid for in full," Ukrainian President Viktor Yushchenko said in a telegram to European leaders.

The European Union, which had taken a hands-off approach early in the dispute, appeared to be running out of patience Tuesday in a joint statement (by the Czech presidency, the EU executive and European Commission) that called the situation "completely unacceptable."

The EU statement complained that "without prior warning and in clear contradiction with the reassurances given by the highest Russian and Ukrainian authorities to the European Union, gas supplies to some EU members have been substantially cut." The statement went on to demand that Moscow and Kiev move swiftly to forge a "definitive settlement" to their dispute.

The Orthodox Christian world, which includes Russia and Ukraine, will be in the midst of Christmas celebrations Wednesday, which makes any immediate action unlikely.

The chief of Ukraine's Naftogaz, Oleh Dubina, told journalists Tuesday that he will travel to Moscow on Thursday to meet with top Gazprom officials in an attempt to put the price negotiations back on track.