17 Jun 2014

Russia cuts off gas to Ukraine

10:00 am on 17 June 2014

Ukraine says Russia has cut off all gas supplies, in a major escalation of a dispute between the two nation.

Russia's state-owned gas giant Gazprom said Ukraine had to pay upfront for its gas supplies after Kiev failed to settle its huge debt, the BBC reports.

Gazprom had asked Ukraine's state gas firm Naftogaz to pay $US1.95 billion of the $US4.5 billion said it was owed.

It said it would continue to supply gas to Europe, although Gazprom chief Alexei Miller warned there now were "significant" risks for gas transit to the EU via Ukraine.

Ukraine has enough reserves to last until December, according to Naftogaz.

A gas metering station in western Ukraine.

A gas metering station in western Ukraine. Photo: AFP

The White House has urged Moscow to resume talks with Ukraine, saying an EU proposal that Kiev pay $US1 billion and the rest in instalments was a reasonable compromise.

Relations between Russia and Ukraine remain tense since Moscow annexed Crimea in February. Kiev says Moscow backs separatists in the east of the country, a charge Russia denies.