Russia warns of Ukraine gas row No. 3

MOSCOW, Nov. 2 (UPI) -- The Kremlin has warned that gas deliveries to Europe might be disrupted as another payment row between Russian and Ukraine is in the making.

Russian Prime Minister Vladimir Putin has told the EU that Russian gas deliveries to Europe via Ukraine could be in danger if Kiev does not pay the bills sent by Russian state-owned energy giant Gazprom.

"Putin drew the attention of the EU leadership to signals, including those received via official channels from Kiev, of possible problems with payments for Russian gas supplies," a Putin spokesman was quoted as saying by Russian news agency Interfax.

On Monday Putin urged Brussels to lend Ukraine $1 billion to settle the Russian gas bill.

"Why have they gotten so stingy down there? Let them get something out of their pockets," he said in televised remarks after talks with Danish Prime Minister Lars Lokke Rasmussen. Gazprom has just paid Ukraine transit fees $2.5 billion in advance, Putin added.

But Ukraine will likely need more money. The country's already weak economy has been hit hard by the global downturn, contracting 21 percent in the first quarter of 2009.

The EU said it is in contact with the Kremlin and Ukraine but has not yet given any aid pledges.

"(Swedish) Prime Minister (Fredrik) Reinfeldt stated that both the Swedish and the Czech presidency had followed this issue closely and that we will continue to do so," the Swedish EU presidency said in a statement.

Ukraine is an important gas hub for Europe -- around one-fifth of the continent's gas supplies arrive via Ukrainian pipelines. However, internal power struggles have undermined Ukraine's supply reliability. Observers say a row between Yulia Tymoshenko and Viktor Yushchenko, who are facing off in a January presidential election, has brought the gas issue back on the agenda.

Europe in January battled its worst energy crisis in more than three decades when a dispute between Russia and Ukraine halted gas supplies to Europe during a bitter cold spell, leaving several countries in Central and Eastern Europe without adequate heating supplies.

Relations between Kiev and Moscow first turned sour in early 2006, when Russia temporarily shut down Ukraine's gas supply until Kiev agreed to pay higher prices. The crisis lifted the issue of energy security near the top of the European agenda, with Western leaders scrambling to diversify energy import sources.