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12.01.2012

Ukraine To Halve Russian Gas Purchases: Minister

Ukraine said on Wednesday it would cut purchases of Russian gas supplies by half, drawing loud protests from Moscow and raising the spectre of a fresh energy conflict between the two uneasy neighbours.

Ukraine and Russia have for months been locked in talks, with Kiev seeking to negotiate a better gas price and Moscow angling for control of Kiev's Soviet-era gas pipeline network.

"We are reducing gas purchases by half and from January 1 our gas off-take will stand at 27 billion cubic metres," Ukraine Energy Minister Yuriy Boiko told reporters in the capital Kiev.

"We will purchase as much as our economy requires," he said in comments confirmed by his office. "If our partners have questions they could solve them in a civilised manner."

Ukraine currently serves as Europe's main link to Russia's natural gas supplies and a previous dispute over prices led to a cut-off that lasted three weeks in January 2009.

Russia hit back, saying Ukraine had not agreed the move with Russian gas giant Gazprom, indicating Kiev could face stiff penalties.

"Ukraine has made such a statement without agreeing with the Russian side," Gazprom chief executive Alexei Miller told Russian President Dmitry Medvedev in televised remarks.

"We do not have any changes to the contract, especially if we talk about changes of the annual contractual quantities, supply amounts for the next year," he said.

According to the terms of the "take or pay" contract, Ukraine would have to pay for the gas it did not use, Miller said, hinting that Gazprom could even pull the plug on gas supplies altogether.

Copyright 2011, AFP. All rights reserved.

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