Gazprom to halt gas to Ukraine if no payment by Monday

MOSCOW –– Russian natural gas exporter Gazprom will halt supplies to Ukraine if it fails to pay off $1.95 billion of its gas debts by Monday, chief executive Alexei Miller said on Thursday.

His remarks signalled Gazprom has ruled out extending the deadline for a third time to increase the chances of resolving a pricing dispute at talks and averting cuts in supplies that could also disrupt deliveries to the European Union.

The gas pricing disagreement is central to Russia’s crisis in relations with Ukraine, which has led to the worst standoff with the West since the end of the Cold War.

No agreement has been reached in several rounds of talks brokered by the European Commission. As the latest talks hit an impasse, Gazprom set June 16 as the deadline for Ukraine to pay off part of its debt.

“If Ukraine pays for no [gas] volumes at all, it means that... gas shipments to Ukraine will be zero,” Miller said in televised comments.

Moscow said Ukraine had piled up more than $4 billion in debts to Gazprom, which also delivers gas to the EU, half of it through pipelines that cross Ukraine.

Russia almost doubled the gas price for Ukraine to $485 per 1,000 cubic metres from April 1 after Ukraine’s Moscow-leaning president was toppled in February.

Ukraine wants Moscow to stick to the price of $268.5 agreed for Kiev at the end of last year after Yanukovych ditched plans to forge closer ties with the European Union.

Moscow has offered to cut it to $385 by eliminating an export duty of $100 per 1,000 cubic metres. This would be in line with the average price for Russian gas in Europe.