Ukraine Halts Russian Gas Imports, EU Flow Unaffected

Ukraine halted natural gas imports from Russia on Wednesday after a failure to agree on a price for the third quarter, state transport monopoly Ukrtransgaz said, in talks loaded with the political tension between the two.

Russian gas flows to Europe via Ukraine were unaffected,

"From today, Ukraine is not getting gas from Russia. Transit supplies are as normal," Ukrtransgaz spokesman Maksim Belyavsky said.

Russia had proposed keeping prices unchanged from the second quarter at $247 per 1,000 cubic metres with a discount of around $40 per 1,000 cubic metres. Kiev wants better terms.

Ukrainian state energy firm Naftogaz said after Tuesday's failed talks that it would stop buying gas from Russia until new terms had been agreed.

Energy Minister Volodymyr Demchyshyn said Ukraine would buy gas from other sources and there would be another round of talks with Russia in September.

"Gazprom will not supply Ukraine under any gas price if there is no prepayment," Alexei Miller, head of the Russian gas exporter, said in a statement

Gazprom accounts for around a third of Europe's gas needs and roughly a half is pumped via pipelines crossing Ukraine. Moscow and Kiev regularly dispute supply terms and rows have led to disruptions in supplies to Europe in previous years.

Exports to Europe were unaffected during last year's row but Russia has warned that gas storage in Ukraine needs another 7 billion cubic metres to ensure the pressure needed to get gas to Europe in the winter.

On June 30, Ukraine received 22.9 million cubic metres of gas from Slovakia, 11.0 million from Russia and 2.7 million from Hungary.

Ukraine expects to receive 13.6 million cubic metres of gas from Slovakia on Wednesday, Belyavsky said.

Ukraine, whose relations with Russia are at rock-bottom following Moscow's annexation of Crimea and its backing for Ukrainian separatists, began large imports of gas from Europe in 2013 in a bid to reduce its energy dependence on Russian supplies.

By Pavel Polityuk and Katya Golubkova