Russia said today it had cut off gas to its neighbour Ukraine over a contract dispute but had increased supplies to customers in the rest of Europe.
European Union states, which receive a fifth of their gas from pipelines crossing Ukraine, want to avoid a repeat of a January 2006 row when Moscow cut off supplies to Ukraine causing a brief fall in gas supplies to other parts of Europe.
Moscow and Kiev say they will honour their contracts to supply gas to European customers, who analysts say have enough reserves to manage without Russian supplies for days, not weeks.
"We have fully cut off supplies to Ukraine as of 10am (0700 GMT) today," an official at Gazprom's headquarters in Moscow told reporters.
Another company spokesman said it had stepped up export volumes for European consumers beyond Ukraine.
"Deliveries for export have been increased to 326 million cubic metres per day," Gazprom spokesman Sergei Kupriyanov told a news conference.
Ukraine's state energy firm Naftogaz said it had already seen a reduction of pressure in its pipelines, and will now automatically pump gas from its reserves.
Russia's Vesti-24 television station reported from a compressor station in Kursk region, near the border with Ukraine, that the volume of gas passing through the station to Ukraine was now four times below the normal level.
Pipelines that cross Ukraine carry about one-fifth of the EU's gas needs and are a major source of foreign currency revenue for Gazprom, Russia's biggest company.
A new cut-off could tarnish Russia's reputation as a reliable energy supplier to Europe just several months after a war with Georgia pushed relations with the United States to the lowest level since the Cold War.
Russia says the cut-off does not apply to shipments to Europe, but there could be a knock-on effect if it causes a drop in pressure in the transit pipelines or if Kiev halts flows to Europe to use them as a bargaining chip.
Germany's E.ON and BASF and Italy's ENI are among the biggest customers for Russian gas.
Countries in eastern and central Europe are likely to feel any disruption first because they are closer to the potential bottleneck in Ukraine.
Poland's pipeline operator said it had so far seen no decline in gas pressure.
Istvan Kutas, a Hungarian spokesman for E.ON which sells gas on the wholesale market in Hungary, said that they had not been officially informed that gas deliveries would be cut. A fall in pressure in the pipeline would reach the Hungarian stretch by midday at the earliest, he said.
Russian prime minister Vladimir Putin called European Commission president Jose Manuel Barroso on Wednesday to explain the possible consequences of a cut-off, Mr Barroso's office said.
It said Mr Barroso had also received assurances from Ukrainian prime minister Yulia Tymoshenko that there would be no disruption to supplies to the EU.
Ukrainian president Viktor Yushchenko and Tymoshenko urged Russia in a joint statement to continue talks without cutting deliveries. Gazprom said the contract to supply gas to Ukraine had expired.
Reuters