UPDATE 1-Russia, Ukraine argue over gas as EU reports shortage

Thu Feb 2, 2012 11:37am EST

Related Topics

* Gazprom executive says bewildered by reports of gas cut

* Says has upped supply to maximum in middle of harsh winter

MOSCOW/KIEV Feb 2 (Reuters) - Russian gas export monopoly Gazprom on Thursday denied cutting supplies to cold-stricken Europe, pointing the finger at transit nation Ukraine, which in turn said it was taking only as much fuel as agreed in its contract with Moscow.

Gazprom's Deputy Chief Executive Officer Alexander Medvedev said he was bewildered by reports of Russian gas supply cuts to Europe, adding the company had been cranking up exports.

Earlier this week, the European Commission said gas supplies into Italy via the Austrian border had been reduced by 10 percent from normal levels.

"Our company has increased gas supplies to European countries ... to the maximum in the middle of a harsh winter in Russia and Europe," Medvedev, who heads Gazprom's exporting arm, said in a statement.

He added Gazprom had been pumping gas to Europe at an equivalent annual pace of 180 billion cubic metres (bcm) compared to the 150 bcm it shipped last year.

Medvedev also said Ukraine, which tranships most of Gazprom's gas bound for Europe and buys the fuel for its own needs, was taking Russian gas at a pace which was above contracted levels.

"Ukraine is currently taking gas at the annual pace of 60 billion cubic metres, which is significantly above contracted levels," Medvedev said.

Ukrainian state energy company Naftogaz quickly replied with a statement denying any contract violations.

"State energy firm Naftogaz guarantees that it will meet the schedule on natural gas supplies to European countries and domestic consumers," Naftogaz said.

"The company also notes that the volume of gas transit through Ukraine's territory and the offtake of imported gas are at levels set by the contract with Gazprom."

Last month, Ukraine announced plans to cut imports of Russian gas - saying it is too expensive for its economy - to 27 bcm this year from 40 bcm in 2011 and to replace it with alternative energy sources such as coal.

Russia used to export around 80 percent of its gas to Europe through Ukraine before the launch of the 27.5-bcm-a-year Nord Stream pipeline last November.

Moscow has accused Kiev of siphoning gas bound for Europe in the past, most recently in early 2009, when the two ex-Soviet nations were locked in a bitter dispute over supply prices.

Ukraine is also unhappy with the price of Russian gas it imports and has sought to renegotiate the price for over a year but the talks appear to have stalled.

It has, however, repeatedly pledged to honour the existing contract and to facilitate uninterrupted gas transit to Europe.

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