11 Apr 2014

Ukraine gas bill could hurt Europe

9:13 am on 11 April 2014

President Vladimir Putin has written to European leaders warning that a dispute over Ukraine's gas debt to Russia could affect supplies of Russian gas to Europe.

President Vladimir Putin.

President Vladimir Putin. Photo: AFP / Ria-Novosti / Pool

His comments are the strongest sign yet that Russia could curtail supplies of gas to Ukraine.

Russia supplies 30 percent of Europe's natural gas, half of which goes through Ukraine.

President Putin's letter said that if Ukraine does not settle its energy bill, Gazprom will be "compelled" to switch over to advance payment, and if those payments are not made, it "will completely or partially cease gas deliveries".

Mr Putin added that Russia was "prepared to participate in the effort to stabilise and restore Ukraine's economy" but only on "equal terms" with the EU.

Nearly one-third of the EU's natural gas comes from Russia.

Previous Russian gas disputes with Ukraine have led to severe gas shortages in several European countries. The EU says it has extra gas supplies and reverse-flow technology to deal with any such disruption now.

Russia has nearly doubled the price it charges Ukraine for gas since President Viktor Yanukovich was deposed in February.

Gazprom said on Wednesday Ukraine's debt for supplies of gas is now more than $US2 billion