Russia Shuts Off Gas Supplies to Europe

Updated from 2:14 a.m. EST

By Maria Danilova

KIEV, Ukraine -- Russia has shut off all its gas supplies to Europe through Ukraine -- the latest move in a pricing dispute that has reduced or halted fuel deliveries to a dozen countries during a winter cold snap.

Russia's gas monopoly Gazprom, which had sharply limited supplies through Ukraine on Tuesday, has stopped all gas shipments through the country as of 7:44 a.m. local time, said Valentyn Zemlyansky, spokesman for Ukraine's Naftogaz.

About 80% of Russian gas to Europe is shipped via Ukraine. Other smaller pipelines run through Belarus and Turkey.

"It was the Russian side's decision to stop all gas deliveries to Europe" through Ukraine, Naftogaz head Oleh Dubina told reporters. "I think it is inappropriate."

Russia confirmed the cutoff, but said it was Ukraine's fault because it had shut down the last pipeline carrying gas from Russia. Gazprom also says it is reducing to compensate for the gas it accuses Ukraine of diverting.

The Russia-Ukraine natural gas dispute has left tens of thousands of people in Europe without heat as governments scrambled to find alternative energy sources.

By early Wednesday, Bulgaria, Greece, Macedonia, Romania, Croatia, Serbia and Turkey had all reported a halt in gas shipments, while France, Germany, Austria, Poland and Hungary had reported substantial drops in supplies from Russia.

Russia stopped all gas shipments to Ukraine on Jan. 1 after both countries failed to agree on prices and transit fees for next year.

Over the past week, Russia accused Ukraine of siphoning off tens of millions of cubic meters of gas meant for Europe from its transit pipelines.

Ukraine admitted diverting some transit gas, saying it had the right to use the fuel to run its pumping system. Gazprom then started dramatically reducing supplies to European consumers this week.

The crisis erupted after Russia and Ukraine failed to agree on a gas price for 2009 and on payment of $600 million Gazprom says it is due from Naftogaz.