Ukraine Gas Supply Cut 'Imminent'

KIEV, Ukraine -- Gazprom says it will reduce its gas shipments to Ukraine from 1500 GMT on Tuesday unless a deal is reached about a $1.5bn (£770m) outstanding gas bill.

Gazprom chief executive Alexei Miller
Gazprom said only gas sent from Russia, which makes up around 25% of Ukraine's total supply, would be affected.

Kiev played down the threats, claiming assurances from Moscow that Russian gas exports would not be affected.

Gazprom has assured the rest of Europe that the dispute will not affect their supplies, which come through Ukraine.

Last-ditch talks

State energy firm Gazprom had originally scheduled the cut-off to begin at 0700 GMT on Tuesday.

But the deadline was pushed back eight hours as its executives met with the management at Ukraine's state-energy group Naftogaz to settle the back payment.

The two sides are due to resume talks on Tuesday.

A Gazprom spokesman Sergei Kupriyanov said earlier that he did not expect the matter to be resolved imminently.

"The pace of talks we are seeing at the moment shows that it is difficult to expect that all the problems would be settled today and that all differences would be removed," he told a Moscow radio station.

Meanwhile, Ukraine's Prime Minister Yulia Tymoshenko appealed for calm and suggested that Gazprom's threats were empty.

She said that Russian First Deputy Prime Minister Sergei Ivanov had "informed that a cut-off will not take place."

Source: BBC News