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Gazprom to Halve Gas Supply to Ukraine

Gas giant Gazprom, whose chairman Dmitry Medvedev was elected Russian president on Monday, said it will halve gas supplies to Ukraine from Tuesday because a debt dispute between them has not been resolved.

On Monday, the world's top gas producer and Russia's gas export monopoly reduced supplies to Ukraine by 25 percent over a $600 million debt and a conflict over deliveries in 2008.

Both Gazprom and Ukraine said supplies to Europe were running normally. Almost a quarter of Europe's gas supplies pass through Ukraine and gas disputes between Moscow and Kiev tend to cause anxiety in European energy markets.

Gazprom's spokesman Sergei Kupriyanov told reporters gas supplies to Europe through Ukraine were uninterrupted, running at capacity at 356.6 million cubic metres of gas per day.

Ukraine will get around 70 mcm of gas per day, or 50 percent of the usual volumes from 5 pm London time on Tuesday.

"The Ukrainian side has not resumed talks. Naftogaz did not fly in... The issue of debts for gas supplied to Ukraine has not been resolved," Kupriyanov said.

"We call on the Ukrainian side for a speedy resolution of all contentious issues at the negotiating table," Kupriyanov said.

Though all of Gazprom's exports are reaching Europe, Ukraine said the firm had not paid transit fees for gas going to Europe since December, a claim denied by Gazprom.

Gazprom has threatened to cut gas supplies during previous pricing disputes with former Soviet neighbours Ukraine and Belarus, but this is only the second time it has acted on the threat after a landmark cut in the New Year of 2006.

That brief disruption reduced supplies to Gazprom's west European customers, making them wary of any hint of a new row. The new reduction comes as Europe's heating season is nearing its end, unlike in 2006 when it came in the middle of winter.

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