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Russia says no gas talks until Kiev pays its bill

Russia on Monday said it would hold no further talks over gas until Kiev settled its bills and warned it would redirect exports if Ukraine tries to siphon off European supplies.

MOSCOW: Russia on Monday said it would hold no further talks over gas until Kiev settled its bills and warned it would redirect exports if Ukraine tries to siphon off European supplies.

Moscow has cut exports to Ukraine after attempts failed to broker an 11th-hour deal on future gas supplies with state-owned Russian giant Gazprom.

"Due to Ukraine's the unconstructive position, there is no need for (official) consultations" with the European Union, said Russian Energy Minister Alexander Novak.

Russia now wants Ukraine to prepay for all its gas, effectively cutting off supplies as the countries are locked in a dispute over billions of dollars in unpaid debts.

EU Energy Commissioner Guenther Oettinger warned that the bloc may face gas shortages this winter if Ukraine siphons of supplies intended for the 28-nation bloc, as it has done twice before in the past decade.

Gazprom chief Alexei Miller said Russia would carefully monitor the situation and could ramp up supplies along other routes if Ukraine tries to take supplies intended for EU customers.

Gazprom spokesman Sergei Kupriyanov stressed that for now gas for European clients was "being supplied in full accordance with original contracts".

Ukraine receives almost half of its gas from Russia and transports 15 per cent of the fuel consumed in Europe.


The breakdown in talks compound the problems of Kiev's new pro-Western leaders as they confront a two-month separatist insurgency threatening the very survival of the ex-Soviet state.

Ukraine's Prime Minister Arseniy Yatsenyuk called the supply halt "another stage of Russia's aggression against the Ukrainian state".

Gazprom said it had further notified Europe of possible gas disruption and lodged a $4.5 billion (3.3 billion euro) lawsuit against Ukraine with an arbitration court in Stockholm.

"If the debt in the amount of $4.5 billon is settled, we will be ready to continue the talks," Novak said.

Kiev responded by lodging its own $6.0-billion suit against Gazprom with the same Stockholm court to recover past "overpayment" for gas.

Oil giants BP and ExxonMobil on Monday insisted they remain committed to Russia's state oil giant Rosneft, despite the latter's chief executive Igor Sechin being named among officials facing US sanctions over Russia's stance on Ukraine.

Miller said Ukraine would not be able to wean itself off Russian gas and urged Kiev to pay up before winter.

"Of course Ukraine cannot do without Russian gas," he said. "Ukraine will be saved if it pays its debts."

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