Russia will cut off Ukraine's gas pipeline after talks between the countires failed in a move that threatens the supply to Europe.
Russia’s Gazprom monopoly announced that its engineers had begun preparations to turn off gas to Ukraine, claiming that Kiev had refused to sign a new contract.
Vladimir Putin, the Russian Prime Minister, could barely conceal his fury that Moscow was once again being made to appear in Western eyes as an unreliable energy supplier in the depth of winter. Reporting to President Medvedev, Mr Putin said that despite Russia’s offer of a below-market price for gas in 2009, Kiev had not only rebuffed Moscow but threatened to disrupt onward supplies to Western Europe.
According to Mr Putin, Ukraine had been offered a new price for gas of $250 per 1,000 cubic metres, a hike on the $179.5 it had been paying but significantly lower than the free market price of $418.
“Our Ukrainian partners have officially notified us that, in case no contract is signed on gas supplies for Ukraine itself, it will block the transit of our product to principal consumers in Western Europe,” Mr Putin said.
“We believe that this is an absolutely improper position both from the economic and from the legal point of view,” he said, adding that if transit agreements were breached, there would be “serious consequences” for Ukraine and “consumers in European Union countries”.
Throughout the day there we reports that Ukrainian Prime Minister Yulia Tymoshenko, popularly known as the “gas princess”, was to head to Moscow in an attempt to reach a last-minute deal, but by evening her trip was cancelled, according to the Russian news agency Interfax, on the orders of Ukrainian President Viktor Yushchenko.
http://www.timesonline.co.uk/tol/news/world/europe/article5425472.ece
