Ukraine to leave Europe without Russian gas

Only about one-quarter of the gas imported by Ukraine is of Russian origin; the rest comes from Turkmenistan and Kazakhstan in pipelines controlled by Gazprom. Naftogaz said that by going ahead with the threatened reduction, Gazprom would be cutting the Central Asian gas as well as Russian-origin gas - a move that it said "grossly violates technical agreements between the two companies."

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Gazprom last month threatened to cut supplies to Ukraine over a US$1.5 billion debt dispute, timed to coincide with Yushchenko's visit to Moscow. That cutoff was avoided by a last-minute agreement between Yushchenko and President Vladimir Putin.

But documents formalizing that agreement have not been signed by Ukraine's natural gas company, and Gazprom says Ukraine still owes US$600 million for gas delivered this year.

Zemlyansky, the Naftogaz spokesman, said the current dispute focused on the controversial middlemen companies that are used in the gas trade. He did not elaborate.

Critics say the laborious arrangement is essentially a mechanism for siphoning money into private pockets, and Ukrainian Prime Minister Yulia Tymoshenko has called for direct dealings with Gazprom.

Both the Central Asian gas and the Russian-origin gas that Ukraine imports are purchased from RosUkrEnergo, an intermediary company half-owned by Gazprom and half by two Ukrainian businessmen. The gas in turn is sold to UkrGazEnergo - jointly owned by Naftogaz and RosUkrEnergo - which then supplies Naftogaz.

The agreement reached last month by Putin and Yushchenko foresaw the elimination of the intermediaries, but Gazprom President Alexei Miller later said two other middlemen operations would be created, each to be half-owned by Gazprom and Naftogaz.

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