Russia to cut off gas supplies to Ukraine

Russia will cut off natural-gas supplies to Ukraine if no compromise is reached by Jan. 1 in a dispute over prices, officials with Russia's state-run gas monopoly said Tuesday, markedly raising the stakes in the increasingly acrimonious dispute.Gas giant Gazprom also gave a tough rebuttal to Ukrainian President Viktor Yushchenko's proposal that price hikes for Russian gas supplies be gradually implemented. Moscow has proposed tripling its gas prices immediately.



In an interview with the Kremlin-backed satellite TV channel Russia Today, Gazprom Chief Executive Officer Alexei Miller said time was running out for reaching a new contract with Ukraine.



"If no compromise over Russian gas supplies to Ukraine is found before the New Year, the supplies will be stopped," Miller said, according to Russia Today.

About 80 percent of the natural gas Russia exports to Europe passes through Ukraine, which gets almost half of its gas imports from Russia.



"If we don't have a contract (with Ukraine) then all the gas in the pipe goes to European consumers," Gazprom spokesman Sergei Kuprianov said in comments on Ekho Moskvy radio.



"We want to avoid this situation, but we are preparing for a negative development," Kuprianov said.



Ukraine's state-run gas company Naftogaz Ukraina refused to comment. Ukraine's Fuel and Energy Minister Eduard Zanyuk was traveling in the gas-rich Central Asian nation of Turkmenistan and could not be located for comment.



Russia has proposed more than tripling the price it charges Ukraine for gas from the current $50 per 1,000 cubic meters. Ukraine has rejected the proposal, saying it would undermine the nation's industry.



On Monday, Yushchenko promised that his country would guarantee Russian natural gas deliveries to Europe, and proposed an agreement whereby Ukraine would shift gradually to paying market prices for Russian gas.



Kuprianov said, however, in comments on state-run television that the proposal was "absolutely unacceptable." Such an arrangement could stretch the process over several years, he said. Negotiations that stretched late into the night Monday ended unsuccessfully, he said: "The talks ended with nothing."



Russian President Vladimir Putin struck a hard line last week, saying Ukraine's economy had seen fast growth this year and the government in Kiev had received substantial privatization revenues and Western loans.



Against the backdrop of its disagreements with Kiev, Russia has also pushed for alternate pipeline routes to supply gas to Europe.



Last week, Russian and German dignitaries marked the symbolic beginning for a pipeline that is to stretch along the Baltic seabed to Germany, allowing Russia to bypass the Ukrainian pipeline routes, as well as another that goes through Poland and Belarus.