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EU
countries have complained to Russia about disruption to the gas supply
after its giant state-owned monopoly Gazprom cut the flow to Ukraine in
a price dispute. Supplies for Western Europe are transported through
the same pipelines. The BBC News website answers some key questions.
Why was the gas turned off?
Gazprom cut supplies to Ukraine on 1 January 2006 after
a deadline for a new price deal expired without agreement. Kiev
declined a last-minute offer for a three-month stay of execution if it
agreed to the four-fold price increase after that. It said it was ready
to pay a "market price" but wanted a gradual transition rather than an
overnight change.
What was the impact on Western Europe?
There have been calls in the affected European countries to diversify away from reliance on Russian gas.
Within hours of the cut to Ukraine's supply other
countries began reporting pressure drops in their pipelines. France,
Germany, Poland, Italy and Slovakia all reported drops in supply.
The European Union as a whole gets around 20% of its gas
from Russia - and about 80% of that comes via pipelines crossing
Ukraine.
The EU has urged Russia and Ukraine to resolve the
dispute quickly and EU gas experts are to discuss the crisis in
Brussels on Wednesday.
Gazprom has pledged to restore supplies to Central and
Western Europe fully by the end of Tuesday. Austria, Hungary and
Slovakia have reported a resumption of normal flows.
Is Ukraine siphoning off supplies meant for the EU?
Russia has accused Ukraine of stealing gas destined for Western Europe - a charge strongly denied by Ukraine.
Ukraine also imports gas from Turkmenistan via the
Russian pipeline network and Ukrainian officials say they are
continuing to get Turkmen gas. Russia, on the other hand, says it has
stopped the Turkmen gas entering the system and that the only gas now
in the pipeline is for its customers in Central and Western Europe.
Ukraine insists that under existing contracts it is also
entitled to 15% of the Russian gas, in payment for transporting it to
Europe.
What can Western Europe do?
Western Europe has some gas in storage that can be used to make up for short-term disruptions.
The biggest gas producer in the region, Norway, says it
cannot help by increasing output because it is already working at
maximum capacity. Another potential source is liquefied natural gas
from Algeria.
Poland says it wants Russia to send more gas through another pipeline, which runs through Belarus.
What about the impact on Ukraine?
Turkmenistan is Ukraine's largest gas supplier, but
Russian supplies still account for about 30% of total Ukrainian gas
consumption. The loss of those supplies could be a real problem in
winter.
Ukrainian gas industry officials have said that heating
needs will be met from the country's own gas production, but there
might be reduced supplies to industrial customers.
Turkmenistan and perhaps Kazakhstan might be alternative
sources of gas. But they could not make good a complete loss of Russian
supplies to Ukraine, which are about 25 billion cubic metres a year.
Also, the supplies would have to be delivered via the Russian pipeline
network.
Why does Russia want Ukraine to pay a much higher price than before?
Russian officials say it is a purely commercial matter.
They say the current price subsidises Ukraine and they want a price
linked to international market levels.
Russia wanted to increase the price from $50 to $230 per 1,000 cubic metres. The average charge in the EU is $240.
Ukrainian leaders say the demand is politically
motivated. Relations between the two countries have been strained since
the December 2004 "Orange Revolution" that resulted in the election of
a pro-Western liberal, Viktor Yushchenko, as president.
Some other ex-Soviet republics are still paying much
lower prices. Recent contracts with Belarus - one of Russia's closest
allies - specify a price of $47, and deals with Armenia and Georgia are
for around $110.
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