By Vladimir Soldatkin and Guy Faulconbridge
MOSCOW/KIEV (Reuters) - Russia said on Wednesday it will switch off gas supplies to its neighbour Ukraine on New Year's day, a step that could have a knock-on effect on deliveries to the European Union.
Alexei Miller, head of Russian gas export monopoly Gazprom said several days of talks with Ukrainian officials had failed to settle a dispute over unpaid gas bills and the price at which Ukraine will buy Russian gas next year.
European states depend on Russia for a quarter of their gas and most of its is shipped in pipelines that run across Ukraine's territory. A previous Russian cut-off to Ukraine two years ago briefly disrupted European supplies.
"From 10:00 a.m. (7 a.m. British time) on January 1, Gazprom will completely, 100 percent, cease gas supplies to consumers in Ukraine," Miller told a news conference at the company's headquarters in Moscow.
He said Russia would honour its obligations to supply European customers with gas and said Ukraine should take full responsibility for the crisis. Ukraine state energy firm Naftogaz could not immediately be reached for comment.
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 as a bargaining chip in its dispute.
European states are anxious to avoid a repeat of what happened in January 2006 when, during a similar row, Moscow cut off supplies to Ukraine, causing a brief fall in gas pressure for some European consumers.
Europe depends on Russia for a quarter of its gas supplies. Germany's E.ON and BASF and Italy's ENI are among the biggest customers.
Energy analysts say both Ukraine and European states have sufficient reserves to do without Russian gas for several days, after the mild winter and reduced demand linked to the economic slowdown allowed them to build up stocks.
(Additional reporting by Pavel Polityuk in Kiev and Dmitri Zhdannikov in Moscow; Writing by Christian Lowe; Editing by Giles Elgood)
