Russia, Ukraine trade blame over blocked gas exports

LONDON (Reuters) - Russia and Ukraine on Tuesday accused each other of blocking gas exports to European neighbors as their clash over pricing intensified.

Russian gas supplies via Ukraine stopped to a series of countries from Turkey to France on Tuesday as sub-zero temperatures increased demand for winter fuel.

Deputy Chief Executive Alexander Medvedev of Russian gas giant Gazprom told journalists in London Ukraine had blocked export routes.

"We became hostage to the irresponsible behavior of the transit country ... The situation is very serious," he said, adding that Russia had a good record as a supplier.

"We have a lot to be proud of. Forty years of reliable supply in very difficult times," he said.

The CEO of Ukraine's state run energy company Naftogaz, Oleh Dubyna denied the accusations.

"All these statements about Ukraine cutting gas to Europe are simply untrue. Statements about us not accepting Russian gas and not carrying out transit are also untrue," he told journalists in Kiev.

"So statements by Mr. Medvedev that we have closed pipelines to Europe are wrong as are statements about Ukraine stealing gas. That is simply untrue. Ukraine is fulfilling all its obligations ... Ukraine is ready to supply all gas to Europe if Russia increases supplies."

Kiev and Moscow have clashed every winter since a dispute over gas prices briefly cut supplies to western Europe in January 2006, prompting consuming countries to look for other ways of getting gas that have so far had limited success.

Medvedev said the situation this winter was more serious than three years ago, although he said Russia had learnt from the previous crisis.

"After 2005-2006 we got some lessons, because we were wrongly blamed for what happened at the time," he said.

"There is no reason to blame Russia or Gazprom in this particular case," he said.

Russia has told Ukraine to return 65 million cubic meters of gas that it said has been taken from pipelines shipping gas to Europe and Medvedev said European countries should consider taking legal action against Ukraine.

Russia switched off supplies intended for Ukraine's domestic use on January 1 after failing to resolve a dispute over how much Kiev should pay for its gas.

Apart from the growing impact on supply, Medvedev warned lower flows could lead to technical problems with the Russian gas export pipeline network.

CRAZY IDEAS

Medvedev said Ukrainian state gas company Naftogaz had not come up with any serious proposals that could restore supplies.

"They should come back to the negotiating table but with a constructive proposal, not crazy ideas," he said.

Because it has to burn some of the gas it gets from Russia to operate the compressors that pump the fuel to western Europe, Ukraine wants to charge Gazprom more transport fees if it has to pay more for the gas.

But Medvedev said Gazprom would not renegotiate its transportation contract with Naftogaz that fixes transport charges through to 2010.

"In the gas industry contracts are the Bible and you don't touch the Bible," he said.

The head of Ukraine's state energy firm Naftogaz was expected to fly to Moscow on Thursday to restart talks that broke down on December 31.

Medvedev declined to say what he wanted Ukraine to pay for gas in 2009, adding prices he had mentioned during the row -- from $250 to $450 per 1,000 cubic meters of gas -- were just the range Gazprom was prepared to consider.

"We are not offering, we are just highlighting different prices," he said.

Ukraine paid $179.50 per 1,000 cubic meters of the gas it got from Russia last year. Its economy is reeling from the global economic crisis and it is reluctant to pay much more.

A spokeswoman for Gazprom said that gas the Russian company was buying in Central Asia to help supply Ukraine cost about $380 per 1,000 cubic meters once transports costs were included.

European Union customers pay about $500 per 1,000 cubic meters for their Russian gas, but the price is set to drop in line with crude, which has lost two thirds of its value since peaking in July 2008.

(Writing by Daniel Fineren; editing by James Jukwey)