March 5, 2014 / 12:16 PM / in 4 years

UPDATE 1-Ukraine failed to pay in full for February gas - Gazprom

* Gazprom says Ukraine’s total gas debt nearing $2 billion

* Gazprom may scrap gas discount for Ukraine

NOVO-OGARYOVO, Russia, March 5 (Reuters) - The head of Russia’s top natural gas producer Gazprom said on Wednesday that Ukraine had informed the company it could not pay for February gas deliveries in full, further adding to tensions between Moscow and Kiev.

Alexei Miller said Ukraine’s total debt to Gazprom for gas deliveries was nearing $2 billion.

“Our Ukrainian colleagues informed us that they would not be able to pay in full for February gas deliveries,” he told Russian President Vladimir Putin.

Miller added that Ukraine managed to redeem only $10 million on Wednesday from a total debt of $1.529 billion. He said that Ukraine’s debt would rise by $440 million on March 7, a deadline for payments.

Gazprom, which meets 30 percent of Europe’s gas demand, shipped 86 billion cubic metres, or over half of its total exports, to the European Union through Ukraine last year.

A political standoff between Ukraine and Russia, sparked after Ukraine’s pro-Moscow president fled the country following street protests, has raised fears of disruption to Russian gas supplies.

A Gazprom spokesman said Russian gas transit to Europe via Ukraine was flowing normally.

Putin said on Tuesday that Russia may scrap gas price discounts if Kiev fails to foot the bill on time.

He said Gazprom may effectively increase prices from April. In December, Russia agreed to cut the gas price for Ukraine to $268.5 per 1,000 cubic metres from around $400.

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