Ukraine faces gas cut as talks with Russia fail
A worker turns a valve at an underground gas storage facility near Striy May 21, 2014. The Atlantic WireRussia has cut off gas supplies to Ukraine after a payment deadline passed and negotiators failed to reach a deal with Russia on gas prices and unpaid bills.
Russian natural gas producer Gazprom had warned it would cut supplies if Ukraine failed to pay $1.95bn – out of $4.5bn it says it is owed – by 06:00 GMT.
There is no confirmation supplies have been ended. The Russian firm said it would continue to supply gas to Europe.
Gazprom says Ukraine must now pre-pay for any natural gas after missing the deadline.
Also Monday, Gazprom filed a lawsuit in a Stockholm arbitration court to try to recover Ukraine\’s entire $4.5 billion debt.
Ukraine is a conduit for gas supplies to other parts of Europe. Gazprom notified European countries that shipments through Ukraine will not be affected, but warned there could be a disruption if Ukraine decides to siphon off the gas. A Gazprom spokesman said Ukraine\’s state-owned Naftogaz is obliged to make sure the gas reaches its European customers.
Russia and Ukraine have been embroiled in the energy dispute since April, when Moscow nearly doubled the price of gas to Ukraine to $480 per 1,000 cubic meters. Russia has since offered about a 20 percent discount, but Kyiv negotiators have sought a deeper price cut, closer to the original price.
The energy standoff is part of a larger geopolitical crisis spawned early this year by Ukraine\’s ouster of its Russian-backed president. Moscow responded weeks later by annexing Ukraine\’s Crimean peninsula, despite widespread protests from Western governments.
Sunday\’s 11th-hour energy talks began as Ukraine concluded a national day of mourning for 49 Ukrainian service members killed when their military transport plane was shot down Saturday by pro-Russian separatists in eastern Ukraine.
The Ukrainian Defense Ministry said the Ilyushin-76 aircraft was about to land at the Luhansk airport.
Source – Agencies
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