Russian gas supplies via Ukraine halted

Ukraine's state energy firm said Russia had cut flows through its territory by two thirds, jeopardising supplies to countries including Germany, Europe's biggest economy.

The brinkmanship between the former Soviet allies sent jitters through energy markets in Europe, which receives about one third of its gas from pipelines via Ukraine, and raised questions about Russia's reliability as an energy supplier.

Russia switched off gas supplies intended for Ukraine's domestic use on January 1 after failing to resolve a dispute over how much Kiev should pay for its gas.

Russian Prime Minister Vladimir Putin went further on Monday, saying gas supplies to Europe via Ukraine be cut by about one sixth.

Austria said Russian flows were down 90 percent and the Czech Republic reported a significant fall.

Bulgaria's government called a crisis meeting after Bulgarian officials said flows had been halted along a pipeline spur that also supplies Turkey, Macedonia and Greece.

Bulgaria, where temperatures dropped below minus 15 degrees Celsius overnight, is particularly vulnerable to the disruptions because, unlike Greece and Turkey, it has no access to alternative gas supply routes.

"As of 3.30 a.m. (1:30 a.m. British time) supplies ... to Bulgaria as well as the transit to Turkey, Greece and Macedonia have been suspended," Bulgaria's Economy Ministry said in a statement. "We are in a crisis situation."

Prime Minister Sergei Stanishev called an emergency meeting for later on Tuesday to discuss the problem, and officials have urged households to try to avoid heating their homes with gas.

BRINKMANSHIP

An executive with Macedonia's gas company said the country had reserves for only a couple of days.

Countries further north -- which receive gas from a different set of pipeline spurs through Ukraine -- also reported a worsening situation.

Most larger EU countries say they have large amounts of gas stockpiled after several mild winters, and have access to supplies from sources such as Norway and Algeria.

Putin said on Monday Gazprom would boost supplies through other routes to compensate for the cuts in supplies to Ukraine.

He said he was forced to act because Kiev was siphoning off gas intended for customers in Europe. Ukraine's Naftogaz energy firm denied that and said Gazprom was deliberately endangering supplies to Europe.

"In a few hours Europe will face a problem with gas supplies," a Naftogaz spokesman said on Tuesday morning.

A European Union delegation was due to meet Gazprom's deputy chief executive Alexander Medvedev in Berlin later on Tuesday but the 27-member bloc has said it is a fact-finding mission that will not try to mediate in the dispute.

European Commission President Jose Manuel Barroso said on Monday he had appealed to Putin and Ukrainian Prime Minister Yulia Tymoshenko not to let their dispute affect Europe's gas supplies.

"I hope that the matter will be resolved, as the reality is that if it is not then it may create problems for European countries who are not responsible for the situation," he said.

(Additional reporting by Pavel Polityuk in Kiev and European bureaux; Writing by Christian Lowe; Editing by Timothy Heritage)