Ukraine's Naftogaz pays Russia's Gazprom to avoid threatened cutoff


An unidentified inspector of the Ukrainian Security Agency, left, is seen in the main gas distribution center of the Ukrainian state energy firm Naftogaz in Kiev, Ukraine, Thursday, March 5, 2009. Ukraine's security agency says it is continuing a probe into the state energy firm Naftogaz which comes amid a feud between the country's president and premier. Agency officers showed up at the main office of Naftogaz's branch Thursday as part of probe into alleged diversion of huge amounts of Russian gas. (AP/Sergei Chuzavkov) (Sergei Chuzavkov, AP / March 5, 2009)
By STEVE GUTTERMAN By The Associated Press | MOSCOW (AP) — Ukraine's energy company paid its February bill for Russian gas in full Thursday, officials said, moving swiftly to avoid a cutoff that could have affected deliveries to Europe.

The payment came just hours after Prime Minister Vladimir Putin said that Russia would halt gas supplies to Ukraine if it failed to meet a Saturday deadline — and warned the suspension might stop deliveries to European nations further west, as well.

The threat raised the prospect of a repeat of the January suspension that cut off most Russian gas supplies to Europe for weeks as the result of a bitter price dispute with Ukraine.

The stoppage left millions of Europeans without heat during a cold spell and angered the European Union, which accused Russia and Ukraine of holding its citizens hostage to their standoff. About 20 percent of the gas consumed in the European Union comes from Russia through pipelines that cross Ukraine.

Naftogaz on Thursday transferred the final $50 million installment of a $360 million payment for gas consumed in February, the Ukrainian company's spokesman Valentyn Zemlyansky said. Gazprom confirmed that Naftogaz had paid in full for February supplies.

After the sides forged a hard-won deal to end their January price dispute and restore the flow to Europe, Gazprom cautioned that any payment delays could prompt a fresh cutoff.

Putin's threat came after Ukraine's national security service searched the offices of Naftogaz on Wednesday in a raid seen as part of the struggle between President Viktor Yushchenko and Prime Minister Yulia Tymoshenko. The national security service is controlled by Yushchenko; Tymoshenko's government controls Naftogaz.

Ukrainian security agents showed up Thursday at the main office of a Naftogaz branch, Ukrtransgaz, as part of what officials have called an investigation into alleged diversion of huge amounts of Russian gas. Naftogaz employees sent the agents back, citing a court decision they claimed had halted the probe.

Putin said on television that the Naftogaz raid was "a source of extreme concern."

If the dispute caused Naftogaz to miss Saturday's payment deadline, Putin said, "it will lead to the stoppage of our supplies of our energy both to consumers in Ukraine itself and maybe also to our consumers in Europe, since we are hearing about attempts to confiscate the transit contract."

A Tymoshenko ally claimed Wednesday the agents wanted to seize transit contracts to scuttle supplies, but Naftogaz said the contracts were not confiscated.

Putin urged Ukraine's leaders to act in the "deep interests of the people" and not out of political motives or a "struggle over money flows."

Tymoshenko and her allies deny that Naftogaz diverted Russian gas. They claim Yushchenko initiated the search in order to get his hands on the company's profits and hinder the company's dealings with Russia by confiscating vital documents.

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