Ukraine to Stop Buying Russian Gas

Ukraine says to stop buying Russian gas; says cheaper prices offered from Europe.

A clash over natural gas pricing between Russia and Ukraine escalated on Wednesday with Russian exporter Gazprom announcing it would halt deliveries and Kiev saying it could find cheaper supply from Europe.

Moscow and Kiev have clashed over gas pricing repeatedly in recent years and Russia's annexation of Crimea has worsened their relations.

"The government has decided to order (state energy firm) Naftogaz to stop buying Russian gas. It is not that they are not delivering us gas, it is that we are not buying any," Prime Minister Arseny Yatseniuk told a government meeting.

"We are doing this because the price offers from our European partners are significantly better than those from our northern neighbour," he said.

It was unclear whether private Ukrainian firms could still import Russian gas in future.

EC UNFAZED

On Wednesday, Russia's Gazprom said it was halting gas supplies to Ukraine until it had received a new prepayment for deliveries.

A day earlier the Kremlin accused Kiev of deliberately thwarting efforts to restore power to Crimea after unknown saboteurs blew up pylons supplying the peninsula with electricity over the weekend.

Kiev said it did not need any more Russian gas for now and would guarantee the transit of piped Russian gas bound for Europe.

The European Commission said it was not worried about the situation for now. Europe relies on Russia for about a third of its gas, almost half of which is piped via Ukraine.

"The European Commission has no particular concern about the gas flows from Russia to Ukraine and no further comment to make," Commission spokeswoman Anna-Kaisa Itkonen said.

Ukraine has imported 400 million cubic metres of Russian gas so far this month, Ukrtransgaz data showed, and Energy Minister Volodymyr Demchyshyn said this week that Kiev had enough gas in reserve without buying any more.

He said gas consumption this winter is down and estimated that reserves would stand at around 16 billion cubic metres in early December, 2 billion higher than at the same point last year.

By Pavel Polityuk and Maria Kiselyova