Moscow Halts Gas Supplies as Kiev Suspends Russian Gas Purchases

Gas giant Gazprom said on Wednesday it was halting all natural gas supplies to Ukraine after Kiev declared it was suspending all purchases of natural gas from Russia.

Gas giant Gazprom said on Wednesday it was halting all natural gas supplies to Ukraine after Kiev declared it was suspending all purchases of natural gas from Russia.

"Ukraine did not pay for July gas supplies," Gazprom chief Alexei Miller said in a statement.

"Gazprom has halted gas supplies to Ukraine from 10 am (0700 GMT) July 1," he said, according to Agence France Presse.

He stressed that no more gas would be sent to the pro-Western country without prepayment no matter what the future price will be, adding that the gas pricing formula for Ukraine would not be changed until late 2019.

The announcement came after Ukraine declared Tuesday it was suspending all purchases of natural gas from Russia after EU-mediated negotiations in Vienna aimed at keeping supplies running broke down.

“As of June 30, 2015, the agreement between Naftogaz and Gazprom runs out, and conditions for continued supply of Russian gas to Ukraine have not been agreed upon; Naftogaz will no longer be purchasing gas from the Russian company,” a press release by Naftogaz said.

Commenting on this decision, Russian Energy Minister Alexander

Novak said it was politically motivated and there were no grounds for it.

Naftogaz gave assurances that “the transit of Russian gas through Ukrainian territory to Gazprom’s European clients will continue in full, according to contracts agreed.”

Russia will not increase the discount it has offered to Ukraine on gas purchases, Novak told the media, Russia Today reported.

“The price of $247 [per 1,000 cubic meter of gas] is completely competitive, that is why we are very surprised that Ukraine wants a much lower price – it is out of line with the current market environment.”

He stressed that the price “is not subject to correction.”



