By Christian Lowe
MOSCOW (Reuters) - A sharp escalation of Russia's gas dispute with Ukraine cut supplies on Tuesday to the Balkans, Turkey and southeast Europe, and the EU urged Moscow and Kiev to find a solution by the end of the week.
Bulgaria, Turkey, Macedonia, Greece and Croatia said flows of Russian gas via Ukraine had come to a halt, creating what Bulgaria called a "crisis situation" in the middle of winter.
EU member states Austria and Romania said deliveries were down 90 percent and 75 percent respectively. German utility E.ON Ruhrgas said it expected supplies to Germany from Ukraine, via the Czech Waidhaus border point, to stop entirely on Tuesday.
Russia and Ukraine blamed each other for the crisis. It has struck at a time of unusually harsh winter temperatures across Europe, which receives about one quarter of its gas from Moscow.
The dispute threatens to worsen Russia's ties with the West, already fraught after its war with Georgia last year.
"In my opinion there must be an agreement between Moscow and Kiev this week," said Deputy Prime Minister Alexandr Vondra of the Czech Republic, which holds the European Union's rotating presidency.
He said the situation was worsening and could become a serious problem if it persisted for several days.
JAN. 1 CUT
Europe's heavy dependence on Russian energy -- and vulnerability to supply disruption -- was highlighted when Moscow reduced volumes to Ukraine on New Year's Day after failing to reach agreement with Kiev over gas prices.
The two countries have clashed repeatedly on a range of other issues, particularly the ambition of Ukraine's pro-Western leaders to join NATO.
Russian gas giant Gazprom said Ukraine shut down three Russian export pipelines early on Tuesday and said it was a hostage of Kiev's "irresponsible behaviour."
"Russia has requested that the gas which was stolen, which is equivalent to 65 million cubic metres (mcm), should be returned," Deputy Chief Executive Alexander Medvedev said.
The head of Ukraine's state energy firm Naftogaz, Oleh Dubyna, said Russia had probably decided to stop all gas supplies to Europe via Ukraine. That could jeopardise supplies to countries including Germany, Europe's biggest economy.
Gazprom says it usually exports about 300 mcm of gas per day to Europe via Ukraine during the winter while Ukraine consumes about 100 mcm. The latest news of pipeline shutdowns suggests exports via Ukraine running at below 100 mcm, which could mean shortages in Europe in a day or so.
The dispute helped push gas prices higher in London trading on Tuesday.
FREEZING TEMPERATURES
The disruptions come at a bad time for Europe, which is experiencing a cold snap likely to drive up gas demand. Temperatures in Bulgaria fell below minus 15 degrees Celsius (5 Fahrenheit) overnight.
"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."
Bulgaria is particularly vulnerable to the disruptions because, unlike Greece and Turkey, it has no access to alternative gas supply routes.
State firm Bulgargaz told industrial users it was suspending or cutting supplies to a minimum and urged them to switch to alternative fuels such as oil. Two fertiliser companies, Neochim and Agroploychim, were forced to halt production.
The government said people would not be left in the cold, but urged households to start using other means for central heating.
A delegation from the Czech presidency of the European Union met Ukrainian officials in Kiev, while talks between Gazprom and the EU were planned for later on Tuesday in Berlin.
"The situation (with gas supplies via Ukraine to central Europe) ...is getting worse by the minute and we would like to talk about this new situation," Czech Industry Minister Martin Riman told reporters in Kiev.
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.
The conflict between Moscow and Kiev, now in its sixth day, escalated dramatically on Monday when Russian Prime Minister Vladimir Putin ordered Gazprom to cut deliveries of gas to Europe via Ukraine by about one sixth -- the same amount Moscow accused Kiev of siphoning off.
Worries about European gas supplies, coupled with Israel's military operation in Gaza, pushed oil up to a three-week high of $49.91 in New York on Monday. Russia, whose main export is oil, stands to benefit for a recovery in prices.
(Additional reporting by Pavel Polityuk in Kiev and European bureaux; Writing by Mark Trevelyan; Editing by Giles Elgood)
