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Ukraine threatening European consumers of Russian gas

KIEV, July 4 (RIA Novosti) - Naftogaz Ukraine has told Gazprom that reducing supplies of natural gas to Ukraine could lead to a decline in Russian exports to Europe, Novosti-Ukraine agency reported Monday.

The warning came in an official telegram issued by Naftogaz in response to Gazprom's decision to consider 7.8 billion cubic meters of Russian gas lost and later discovered in underground storage in Ukraine as payment for the transit of Russian natural gas to Europe through the country.

Gazprom's decision was communicated by CEO Alexei Miller to Alexei Ivchenko, head of the Naftogaz board of directors and also Ukraine's first deputy fuel and energy minister, last week. Gazprom later notified Ukraine that it would provide up to 1.1 billion cubic meters of natural gas to pay for transit services by year's end.

The Ukrainian government is expected to consider the situation in the gas sector this week.

The Gazprom press service pledged that the company would fulfill its commitments on gas supplies to Ukraine, and said it expected Ukraine to comply with its transit obligations as well.

The head of the Energy Research Center, Konstantin Borodin, was pessimistic about further developments.

"The problem of what is to be done with the 7.8 billion cubic meters will not be solved by autumn, when the heating season begins," he said.

Between fall 2004 and summer 2005, Naftogaz failed to fulfill 40 Gazprom orders to provide gas from storage for export.

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