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Russia Says Kyiv 'Blackmailing' Europe Over Gas

Gazprom controls taps that account for one-quarter of Western Europe's gas.
MOSCOW/KYIV (Reuters) -- Russia has accused Ukraine of deliberately jeopardizing gas supplies to Europe in a sign that prospects are receding of averting a threatened gas cut-off on January 1 that could disrupt supplies to Europe.

Ukraine said it guaranteed supplies of Russian gas through its territory to Europe, contradicting Russian gas giant Gazprom, which alleged Kyiv was planning to confiscate gas bound for Europe if Moscow cuts off supplies to Ukraine.

Russia has said it will turn off the taps to Ukraine on the January 1 deadline if it does not receive $2 billion in arrears and a new supply deal is not concluded.

That threat has alarmed European states that depend on Russian gas for energy -- most of it shipped through pipelines that cross the territory of Ukraine -- and experienced brief supply disruption during a similar row in 2006.

European states, which receive one-quarter of their gas from Russia, have called on both sides to reach a compromise.

Gazprom said on December 31 that Ukraine had begun paying the $2 billion Russia has been demanding in arrears for gas supplies -- one of the central issues in their dispute.

Disagreements remained over the price Ukraine would pay for Russian gas in 2009. Without a deal on this, Gazprom says it will have to stop shipping the fuel to Ukraine hours after their current contact expires at the end of this year.

Officials from the Russian company said they had received a letter from Ukraine's state energy firm Naftohaz stating that if Russia turns off the gas, Ukraine could confiscate Russian fuel bound for customers in Western Europe.

"We cannot describe this position from Ukraine as anything other than blackmail," Aleksandr Medvedev, head of Gazprom's export arm, told a news conference. "And they are blackmailing Gazprom, Russia, and Western Europe."

Naftohaz declined to comment on the existence of any letter.

But President Viktor Yushchenko's First Deputy Chief of Staff Oleksandr Shlapak said it would not interfere with European supplies.

"Ukraine guarantees the technical, secure, reliable, and uninterrupted transportation of Russian natural gas to European countries through its territory," he said.

Earlier on December 31, there were indications Ukrainian Prime Minister Yulia Tymoshenko was preparing to fly to Moscow for a last-minute effort to reach agreement. But it was unclear if she would travel to Moscow with a deal still remote.

"No one knows for certain whether the visit will take place," said a source close to the Ukrainian government.