Russia's Gazprom Warns No Talks Until Ukraine Pays Gas Bill

Russia will only hold talks with Kiev over energy supplies once the Ukrainian government has paid off its outstanding gas bill to Gazprom in full, Russia's deputy energy minister said on Monday.

"We want contract liabilities to be fulfilled... To continue talks, the debt should be paid," Anatoly Yanovsky told reporters.

Russian energy giant Gazprom says Ukraine owes it £3.51bn for gas deliveries and told Kiev that it must pay in advance for gas from June.

The European Union relies on Russia for around a third of its gas needs, around half of which is delivered via pipelines running through Ukraine.

Yanovsky warned that Gazprom would only deliver gas that had been paid for in June, adding that the company would send a preliminary bill before May 16.

Russian President Vladimir Putin wrote to European leaders last month to warn that gas supplies could affect the bloc if Ukraine does not pay its outstanding debts.

Previous price disputes between Kiev and Moscow have resulted in Russia cutting gas supplies to Ukraine in the winters of 2006 and 2009. Russia's neighbour experienced shortages while some European countries were also affected by reduced supplies.

Ukraine wants to renegotiate a 2009 gas contract with Gazprom that locked Kiev into paying for a set amount of gas at the rate of $485 per 1,000 cubic metres.

Former president Viktor Yanukovych had won a reduction in the price to $268.5 per 1,000 cubic metres after he rejected an integration deal with the European Union. But he was ousted from office in February after months of massive protests.

After a pro-European interim government was installed in Kiev, Gazprom hiked the price back to the previous, more expensive rate in a move which Kiev denounced as "political" pricing and refused to pay.