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Last updated at 07:11 GMT, Tuesday, 6 January 2009

A sharp cut in the supply of Russian gas to Ukraine will affect Europe within hours, Ukraine's state gas company Naftogaz says.
EU states are closely monitoring their gas imports after Russian energy giant Gazprom said it would cut exports through Ukrainian pipelines by a fifth.

Gazprom said it was reducing supplies to compensate for the amount it says Ukraine has been siphoning off.

Russia stopped supplying gas to Ukraine last week in a row over unpaid bills.

A statement on Naftogaz's website lists nine countries, including Germany, Poland, and Hungary which, it says, will receive reduced supplies.

"Naftogaz of Ukraine considers that in such a case if European users receive less volumes of natural gas, all claims of the noted countries must be directed to Gazprom," says the statement.

Moments later, Bulgaria's energy minister said Russian gas supplies to Bulgaria, Greece, Turkey and Macedonia had already been cut.

Pipes across Ukraine carry about one-fifth of the European Union's gas needs.

Several EU countries have reported a drop in gas deliveries since 1 January, apparently as a result of the dispute.

'Gas stolen'

The move to reduce supplies going through the Ukraine by a fifth came after Russian Prime Minister Vladimir Putin held talks with Gazprom CEO Alexei Miller.

Mr Miller recommended that deliveries via Ukraine should be reduced "by the amount stolen by Ukraine, that is 65.3 million cu/m of gas".

Future deliveries should be reduced on a daily basis by the amount of gas stolen, he added.

"Start reducing it from today," Mr Putin told Mr Miller on Monday.
Ukraine has denied stealing gas, saying technical problems are disrupting the onward flow of gas to Europe.

Gazprom, in which the Russian state owns a majority stake, said it would compensate by sending more gas to Europe via other routes.

Divisions

The row between Russia and Ukraine has been simmering for weeks. Gazprom says Ukraine owes it money; Ukraine says it has paid its debt. The two sides have also failed to agree on the price Ukraine should pay for gas in 2009.

A similar row between Gazprom and Ukraine at the beginning of 2006 led to gas shortages in several EU countries.

EU leaders have been meeting in Brussels to discuss the dispute and a delegation has also been sent for talks with both Ukrainian and Gazprom officials.

But, say correspondents, the EU is reluctant to get involved in what it describes as a commercial dispute - reflecting Europe's own deep divisions on how to respond to Russia.

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