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article imageRussia Shuts Off Gas To Ukraine, Assures Europe of Supply

By Michael Squires     Jan 1, 2009 in World
Russia has stopped all gas supplies to Ukraine after the collapse of talks failed to resolve disagreement over prices. Ukraine insists that bills have been paid. Russia's gas giant Gazprom said it turned off the taps at 0700 GMT.
The BBC reports that there have been fears that the row could lead to energy shortages in Europe, as pipes across Ukraine carry about a fifth of the EU's gas needs.
A similar row between Gazprom and Ukraine at the beginning of 2006 led to gas shortages in several EU countries.
Ukrainian Prime Minister Yulia Tymoshenko had given her assurances that there would be
"no disruption of gas supplies to clients in the European Union".
Gazprom is the world's largest gas producer and supplies a quarter of the European Union's gas needs - and 42% of its imports. Most of that is transported via Ukraine.
The gas routes through the Ukraine could present more problems than gas shortages.
The population of the Ukraine is split between the policies of it's President Viktor Yushchenko the Ukrainian Prime Minister, Yulia Tymoshenko, over Ukraine admission to NATO.
Russia has on numerous occasions warned the Ukraine not to disrupt gas supplies.
Prime Minister Vladimir Putin had earlier warned Ukraine not to disrupt the transit of gas to Europe.
He warned of "very severe consequences" for Ukraine in terms of its relations with both Russia and European countries.
Gazprom accused Ukraine of blackmail on Wednesday, showing reporters a letter from Naftogaz Ukraine that appeared to threaten to confiscate Russian transit gas if there was no deal. Gazprom insists it has a valid transit agreement with Ukraine until the end of 2010. "Such a formulation is absolutely incorrect from both an economic and legal point of view," Prime Minister Vladimir Putin said of Naftogaz's letter in comments broadcast on state TV. Ukraine would face "serious consequences" if it interfered with transit flows, he added. Gazprom said Naftogaz had been trying to hike the amount Russia pays it to transit gas through Ukraine.
Disruption of gas supplies through the Ukraine to Europe has serious political and economic repercussions.
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