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UPDATE 1-Ukraine threatens more cuts in gas supply-Gazprom

Tue Jan 6, 2009 1:41pm EST

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By Erik Kirschbaum

BERLIN, Jan 6 (Reuters) - Ukraine cut off three key gas pipelines to Europe last night and is threatening to further reduce supply to the continent, Gazprom (GAZP.MM) Deputy Chief Executive Alexander Medvedev said on Tuesday.

Because of the dispute over prices and debt between Ukraine and the Russian gas firm, Gazprom was only supplying a quarter of what it usually delivers to Europe, Medvedev said.

"Regrettably, the Ukrainian side is threatening to cut the deliveries further," Medvedev said after meeting Germany's Economy Minister Michael Glos in Berlin.

Calling it "unprecedented", Medvedev said Ukraine had unilaterally shut off three important pipelines to central and western Europe at 2.30 a.m. central European time.

"The result, against our wishes, is that we are not able to deliver the full amount of gas to Europe. And four hours ago, the last deliveries were running at only a quarter of what they usually are," he said.

Medvedev said he and Glos believed Ukraine should restart talks to resolve the row which erupted on Jan. 1, but added: "Even in this crisis situation we don't see any wish on the Ukrainian side to return to the negotiating table."

Medvedev said the Russian export monopoly would try to use alternative delivery routes.

Glos said: "I have assurances from Mr Medvedev that if the pipelines over Ukraine are blocked or not capable of delivering, that this will be compensated for via other channels."

Russia and Ukraine have accused each other of blocking gas exports to Europe.

Earlier Bulgaria, Turkey, Macedonia, Greece and Croatia also said Russian gas flows via Ukraine had halted, creating what Bulgaria called a "crisis situation" in the middle of winter. (Writing by Dave Graham and Noah Barkin)



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