Ukraine offers to increase gas flow amid Russia-Belarus row

Moscow/Vienna - Ukraine stands ready to increase the transit through its territory of Russian gas to Europe in the wake of Russia's reduction in gas deliveries to Belarus, the Ukratransgaz pipeline company told Russian news agency ITAR-Tass on Monday.

Meanwhile, Minsk rejected the move by Moscow as 'illegal and unjustified' and charged that Russia owed Belarus for transit fees.

The cut in gas supplies to Belarus came as Minsk and Moscow failed to agree on what Moscow says are back payments of 192 million dollars for previous deliveries.

A spokesman for Russian gas monopoly Gazprom said Monday that talks between Moscow and Minsk were continuing. Gazprom said last week that if Belarus tapped gas intended for western Europe, the company would increase gas supplied via Ukraine.

Earlier Monday, Gazprom chief Alexei Miller had disclosed that President Dmitry Medevedev had given the instructions to start cutting the gas flow in the payments dispute.

'Belarus recognises its gas debts, but is proposing to pay them with machinery, equipment and other goods,' Miller said. But Medvedev is insistent that Minsk must pay the bills in 'hard currency.'

Gazprom reported beginning the reduction of gas at 0600 GMT Monday. The cut-off is to gradually increase from 15 per cent to 85 per cent.

Russia is the biggest supplier of gas to Germany, with a share of 37 per cent. Austria gets half of its gas from Russia, while the shares for Bulgaria and Hungary are 95 per cent and 90 per cent, respectively.

Some 80 per cent of Russian gas to Germany is delivered via Ukraine, while a fifth is delivered through pipelines in Belarus.

Last week Gazprom had announced its aim to reduce by 85 per cent its gas deliveries to Belarus, with Minsk then threatening over the weekend to tap into the transit pipelines transporting gas to western Europe.

Gazprom said that if Belarus took such action, the company would then pump its gas via Ukraine into Poland, circumventing Belarus. Gazprom would meet its delivery commitments to the West, Miller said.


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