Ukraine says Russia continues to violate winter gas agreement

BRUSSELS/KIEV (Reuters) - Russia rebuffed Ukrainian accusations it was holding back on gas deliveries and warned that Kiev's credit would run out this week as the two sides sat down on Monday for EU-mediated energy talks in Brussels.

A "winter package" of Russian gas for Ukraine, brokered and part-financed by the European Union runs out at the end of the month and EU officials are now trying to help Kiev arrange summer supplies from Moscow with the two sides locked in conflict over the pro-Russian revolt in eastern Ukraine.

In the latest round of mutual allegations of breaching the current deal, Ukraine's state energy firm Naftogaz said Russia's Gazprom had not delivered what had been paid for. Kiev has complained that some of its gas went to rebel-held areas.

Russian Energy Minister Alexander Novak said he knew of no violations by Gazprom. He also warned that the amount of gas Kiev had paid for in advance would run out in about a week.

Previous "gas wars" between the ex-Soviet neighbours have seen supplies disrupted not only to Ukraine but beyond into the European Union, which gets nearly a third of its natural gas from Russia, half of that delivered by pipelines across Ukraine.

However, despite a warning last week from Russian President Vladimir Putin that Ukraine's chaotic finances might cause energy shortages across Europe, analysts have played down the risks of disruption going into summer.

EU officials said the talks, chaired by European Commission Vice President Maros Sefcovic, was under way in late afternoon after Sefcovic had held preliminary bilateral meetings with Novak and then Ukrainian Energy Minister Volodymyr Demchyshyn.

Novak said Ukraine's credit may last only to the end of the week - if it keeps its demand low at about 10 million cubic metres a day. Ukrainian gas transport monopoly Ukrtransgaz said it ordered that amount on Sunday but received only 5.8 million.

Novak told reporters the talks on Monday would focus first on the technical implementation of the remainder of the winter package. He also said there may be talks on a "summer package".

Moscow cut off supplies to Kiev in June and restored them in December in a dispute over pricing and unpaid bills. Gazprom last week warned that it could stop supplies in March if Ukraine did not pay more up front. Naftogaz said on Friday it sent a small prepayment of $15 million (9.7 million pounds) to Russia "to calm the nerves" of EU neighbours worried about disruption to transit supplies.

(Additional reporting by Katya Golubkova in Moscow, editing by William Hardy)

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