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UTILITY

Russian halt deepens gas crisis

AFP, Kiev
All deliveries of Russian gas through Ukraine were halted yesterday, intensifying a bitter dispute between Moscow and Kiev which risks depriving Europeans of gas amid freezing weather.
In a new twist, Russian Prime Minister Vladimir Putin told state-run energy giant Gazprom on Wednesday to cease all deliveries of natural gas into Ukraine.
At least eleven European states as far west as Austria have reported complete halts of Russian gas supplies during a snap of freezing temperatures of almost minus 25 degrees Celsius (minus 13 Fahrenheit).
Romania declared a state of emergency while 70,000 households in the Bosnian capital Sarajevo spent the night without heating. Bulgaria asked its public to cut back on gas usage and turned off heating on all public transport in Sofia.
Amid intensifying EU efforts to solve the crisis, European Commission chief Jose Manuel Barroso telephoned the Russian and Ukrainian prime ministers and Ukraine agreed to allow in EU observers to monitor gas supplies.
"It is unacceptable that the EU's gas supply security is being taken hostage to negotiations between Russia and Ukraine," a spokeswoman for Barroso told journalists in Brussels.
Ukrainian Prime Minister Yulia Tymoshenko agreed "to immediately send EU technical observers so that they conduct constant monitoring of natural gas supply volumes" in the conversation with Barroso, Ukraine's government said.
Meanwhile Ukraine's state gas company Naftogaz said it would hold talks with Russian energy giant Gazprom in Moscow on Thursday at 0900 GMT, resuming negotiations that broke down on December 31.
In Prague, Czech Prime Minister Mirek Topolanek, whose country holds the EU's presidency, promised a "stronger intervention" from the EU if supplies were not restored by Thursday.
The United States also expressed concern, with US Assistant Secretary of State Dan Fried calling the crisis "a very troubling development."
Ukraine accused Russia of cutting off the gas to Europe while Gazprom blamed Kiev for shutting the last remaining pipeline.
But neither side disputed that all supplies of Russian gas across Ukraine had been halted.
"Russia stopped all transit through Ukraine" at 7:44 am (0544 GMT), the spokesman for Ukraine's state gas company
Naftogaz, Valentin Zemlyansky, told AFP. "Russia has left Europe without gas," he added.
But Gazprom vice-president Alexander Medvedev accused Ukraine of cutting all gas deliveries to Europe, warning of "very serious technical problems" if pipelines stay closed.
"Last night Ukraine shut down all gas pipelines to Europe," Medvedev told reporters in Berlin. "This morning no pipeline is bringing gas through Ukraine to Europe."
Russia, the world's biggest natural gas producer, provides about one-quarter of the gas used in the EU. Some 80 percent of Russia's gas exports to the EU pass though Ukraine.
Russia cut gas supplies to Ukraine on January 1 in a dispute with the country's pro-Western leaders over late payments and new gas prices for 2009.
In the bitter war of words that ensued,
Russia accused Ukraine of stealing Russian gas destined for Europe while Kiev blamed Moscow for the shortfalls.
Austria, the Czech Republic, Romania, Slovakia and Slovenia all announced Wednesday that all their supplies of Russian gas had been cut off overnight with Slovakia declaring an energy emergency.
Bosnia, Bulgaria, Croatia, Greece, Hungary and Macedonia had already said their deliveries had been cut.
In Sarajevo 72,507 households were left without heating overnight as the public central heating system switched to alternative energy sources.
The Bulgarian capital Sofia turned off the lighting on the facades of public buildings such as parliament and the national theatre to save electricity.
"The only solution for Bulgaria is the resumption of deliveries. There is only one gas pipe entering the country and that is via
Ukraine," said Economy and Energy Minister Petar Dimitrov. *
France, Germany, Italy and Serbia all reported drastic falls in Russian gas supplies.
Poland and Turkey said that supplies of Russian gas passing through Ukraine had been completely cut but that they were getting increased amounts through separatepipelines.
The disruption coincides with the advance of an exceptionally cold front across much of central and western Europe. Many countries in Eastern and Central Europe depend on gas for central heating.
Experts have said however the immediate impact of the crisis would be mitigated by the fact that European countries consciously stocked up reserves after a similar Russia-Ukraine dispute caused shortfalls in 2006.