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. Last Updated: 07/27/2016

Kiev Admits Diverting Russian Gas

KIEV -- Ukraine is diverting Russian natural gas exports to Western Europe to make up for cuts in regular supplies, Ukrainian gas officials said Wednesday.

But Russian officials said there was not much they could do to stop Kiev tapping the pipelines to the West.

"We today sent a telegram to the Ukrhazprom concern asking them to let gas transit through Ukrainian territory and not use it for domestic needs," Vladimir Podelyakin, an aide to Russian firm Gazprom's chairman Rem Vyakhirev, said in Moscow.

"But we have no means of control over what Ukraine does."

Gazprom cut supplies to Ukraine at the weekend after heavily indebted Kiev failed to renew 1994 supply contracts in time.

"Gas supplies are down by about 50 percent," said Bohdan Babiy, chief dispatcher of Ukrhazprom.

"We are making up for the shortfalls with gas intended for export to Western Europe, because we can't allow our steel and energy industries to grind to a halt. We realize Russia will fine us heavily for this, but talks are going on non-stop and we expect supplies to increase today or tomorrow."

Importers of Russian gas to Germany and Slovakia said deliveries had dropped this week.

But they ruled out a disruption in supplies. "We have gas in storage and we will be able to meet our commitments," the Slovakian importer said.

Podelyakin declined to say how much gas was currently being shipped to Kiev but he said some deliveries had been restored since Sunday, when supplies were completely halted.

Gazprom ships about 500 million cubic meters of gas a day to Ukraine, about half of which is meant for domestic needs. The rest crosses Ukraine to Western Europe.

Stepan Belai, a government energy official in Kiev, said Ukraine had diverted 12 million cubic meters of export gas Tuesday, the day Gazprom reduced supplies by 52 million cubic meters. "The situation is critical, not only for Ukraine, but also for other countries," he said.

Babiy said Ukraine, which needs 300 million cubic meters of gas a day, was also dipping into underground gas reserves and boosting domestic output to make up the difference.

First Deputy Prime Minister Yevhen Marchuk told a news conference a Ukrainian delegation had agreed that Russia would supply Kiev with gas between now and the end of the year.

Podelyakin said Ukraine had promised to pay in advance for shipments of four billion cubic meters by Dec. 31.

"Russia has once again taken a step in our direction. Gas from Russia has started to come to Ukraine. We have reached a new agreement for gas supplies in December," Marchuk said.

Cash-strapped Ukraine owes Gazprom $1.4 billion for earlier supplies and is hard-pressed to make current payments, he said.

Podelyakin said Ukraine had paid for only 48 percent of this year's gas supplies. Russia had delivered 51.9 billion cubic meters of gas to Ukraine so far this year.

"We have made Kiev several proposals to help it cover its debt, but we are still waiting for an official reply," he said.