Ukraine gas row hits EU supplies

Ukrainian officials had warned of the risk to EU supplies

EU nations have started to feel the impact of Russia's axeing of gas supplies to Ukraine, as Moscow accused Kiev of stealing EU supplies.

Hungary and Poland were the first EU states to have supplies disrupted.

Russia's state-run firm Gazprom cut Ukrainian supplies from the pipelines on Sunday after talks failed to solve a politically-charged price row.

Exports to the EU are carried through the same pipes, and Gazprom now says Kiev is stealing some of that gas.

"There is information that Ukraine has begun siphoning off Russian gas that is designated for European users," Gazprom spokesman Sergei Kuprianov was quoted as saying some eight hours after the Ukrainian supply was cut.

GAS CUT IMPACT Ukraine - loses 100% of Russian imports but carrying EU supplies through same pipes. Firms warned cuts possible Hungary - imports down 25%. Big firms told to switch to oil Poland - levels down 14%. Enough reserves to cover a week of reduced supplies Germany - no problems yet, but later cuts to big firms "not ruled out" France - heavy user of Russian gas, but no problems likely, says government

Ukraine's prime minister denied the allegation, insisting not a single cubic metre of Russian gas was being used.

Earlier, Ukraine's own state-run gas firm blamed Russia for jeopardising Western European supplies.

"Gas is not flowing at all through some transit routes, which can lead to a fall in pressure in all the pipelines and limit the overall supply of gas to Ukraine and Europe," said Eduard Zaniuk, a spokesman for Ukrainian state-run gas giant Naftogaz.

"Naftogaz declares such actions unacceptable because they endanger gas deliveries to Europe."

Ukraine has said it has the right to take 15% of the remaining supplies in the pipelines as payment for transporting the gas to Western Europe.

Europe's Energy Commissioner confirmed the crisis was causing concern, despite previous Russian assurances that EU supplies would not be hit.

Central and eastern Europe's gas pipeline network Enlarge Map

"The dispute definitely does not help us and keeps us worried because 20% of our gas supplies go through this route, so if there is a dispute so there are eventualities that could come out," Andris Piebalgs told the BBC.

"So we are not too certain if everything will happen as both sides have promised us."

EU governments are convening a meeting of their gas industry experts in Brussels on 4 January to discuss the crisis.

Some EU countries rely particularly heavily on Russian gas. Germany, for example, gets about 30% of its gas supplies through Ukraine.

Polish concern

In Hungary, gas firm MOL said its supplies from Russia were already down 25%.

The country's economy ministry is advising large consumers to switch to alternative energy sources like oil wherever possible.

Earlier, Polish gas company PGNiG reported that the amount of gas entering its pipeline system from Ukraine was also down, according to the AFP news agency.

Kiev continues to insist that the loss of Russian supplies - which amount to 30% of its own national consumption - will not hit ordinary Ukrainian consumers during the harsh winter.

However, it has warned that supplies to industry may be affected.

GAZPROM'S 2006 TARIFFS PER 1,000 CUBIC METRES OF GAS Ukraine: US$230 Belarus: US$47 Armenia and Georgia: US$110 Romania: US$280 Average EU charge: US$240 source: AP news agency Q&A: Ukraine gas row

The Ukrainian crisis erupted after Gazprom announced it was quadrupling the price of its gas supplies from $50 to $230 per 1,000 cubic metres.

Ukraine rejected the increase, saying it was prepared to pay a higher price but not on that scale.

Kiev has said it is currently prepared to pay no more than $80 per 1,000 cubic metres of gas.

Many Ukrainians believe Russia is punishing them for their Orange Revolution and the election of Western-leaning President Viktor Yushchenko.

Other countries which remain in Russia's sphere of influence continue to receive gas at below-market prices.