UPDATE 2-Ukraine lowers Russia gas imports due to tight finances, weather

Wed Feb 26, 2014 6:56am EST

* Kiev has paid down $1.7 bln of $3.3 bln gas debt to Russia

* Past disputes disrupted gas deliveries to Europe via Ukraine

* Ukraine says gas flows to Europe on time, volumes normal

By Katya Golubkova

MOSCOW, Feb 26 (Reuters) - Ukraine has slashed gas imports from Russia this month because of stretched state finances and mild weather, acting energy minister Eduard Stavytsky was quoted as saying by Russia's Itar-Tass news agency on Wednesday.

The overthrow of Ukraine's pro-Russia President Viktor Yanukovich at the weekend sparked concerns that Russian state gas exporter Gazprom might exert pressure on a country whose new leaders look set to pursue a pro-EU course.

Ukraine's state energy company Naftogaz had reduced its imports of gas from Gazprom to 28 million cubic metres (mcm) per day as of Feb. 24 from 147 mcm at the beginning of the month, two Russian industry sources told Reuters on Tuesday.

"In this situation when we have difficulties in collecting money ... and a significant gas debt to Russia, we decided to buy less fuel," Stavytsky was quoted as saying. He also noted that the weather had been mild, which would lower demand for heating.

A Gazprom spokesman declined to comment.

Analysts said the fall likely would be temporary.

"We believe that the drop in gas delivery is temporary, as Ukraine is unlikely to find European gas at a lower price than Gazprom's," Otkritie analyst Sergey Beiden said in a note.

"Nevertheless, we think that the market is concerned about whether the debt to Gazprom will be paid and also about how the current events in Ukraine could influence gas transit to Europe and Ukrainian consumption."

Disputes over gas prices between Russia and Ukraine in the winters of 2006 and 2009 led to stoppages in exports to Europe, which gets around a third of its gas from Russia.

In a statement on Wednesday, Ukrainian state-owned gas transport company Ukrtransgaz said gas transits to Europe were at full volumes and on time, adding that from Jan. 1 to Feb. 24 western Europe had imported 12.2 billion cubic metres of gas via Ukraine.

Apart from Ukraine, Russian gas flows to Europe travel via Belarus and two subsea pipelines - under the Black Sea and the Baltic Sea. Gazprom plans to build another subsea pipeline - the South Stream - to bypass Ukraine by 2016.

According to the Russian Energy Ministry, Gazprom shipped 14.3 billion cubic metres of gas to western Europe, including Turkey, in January. It has yet to provide data for February.

On Tuesday, Stavytsky said Kiev as of Feb. 24 had paid off $1.68 billion of its $3.3 billion gas debt to Russia which was amassed over 2013 and 2014.

In December, Russia agreed to reduce gas prices for Kiev by about a third, to $268.50 per 1,000 cubic metres from around $400 which Ukraine had paid since 2009. The deal allows for the price to be revised quarterly.

Ukraine consumes about 55 billion cubic metres of gas each year, and imports more than half of that from Russia. Gazprom exported 161.5 billion cubic metres of gas to Europe last year.

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