Renewed Gazprom, Ukraine gas crisis looms

MOSCOW, Feb. 26 (UPI) -- Gazprom warned it may cut natural gas supplies to Ukraine starting March 8 if its gas company, Naftogaz, does not pay $400 million of its February debt.

"If $400 million is not forthcoming by March 7, it will be necessary once again to cut off Ukraine," said Andrei Kruglov, the finance chief at the Russian energy giant.

The Ukrainian state oil company warned last week of a looming gas crisis stemming from debt from its regional utilities.

"Naftogaz announces that the situation as regards paying Gazprom could worsen because of the catastrophic rise in debts of regional utility companies," the company said.

The board at Gazprom said earlier it had reviewed its relationship with Naftogaz, keeping its obligations intact. "But the volume of gas delivered to Ukraine will be reduced -- fuel will not be supplied to Naftogaz free of charge," Gazprom officials said in statements published by Russian daily Kommersant.

Gazprom disrupted its delivery of natural gas to Ukraine Jan. 1 over arrears and disputes over 2009 contracts. The row left European customers scrambling for alternatives. Europe gets around 25 percent of its gas from Russia, though 80 percent of that travels through Ukraine.

Utility companies owe Naftogaz more than $550 million, though Naftogaz spokesman Valentin Zemlyansky said the company hopes to meet its debt obligations by March 7.