Ukraine switches to European gas amid Russia dispute

Ukraine has said it plans to cover 60% of its gas needs from European suppliers, with the rest being delivered by traditional supplier Russia, according to the head of Ukraine's state gas company.

Ukraine could reduce its dependency on Russian supplies to around a third of its total gas imports if Ukraine sources gas from European markets, said Andriy Kobolyev, chief executive of Naftogaz, as cited by Reuters news agency.

Russia has previously supplied almost all of Ukraine's gas needs but relations between the neighbours have broken down since Ukraine's pro-Russian president fled the country and Moscow subsequently annexed the Ukrainian peninsula of Crimea in March 2014.

Kiev, backed by allies from Brussels to Washington, has accused Russia of fuelling a conflict in eastern Ukraine. Fighting between pro-Russian separatists and government forces has killed 4,800 people since April last year, according to the United Nations.

With the political rift widening in the summer of 2014, Russian state gas supplier Gazprom completely cut off natural gas deliveries to Ukraine, which had refused to pay an inflated price.

Ukraine responded by boosting imports of gas from Europe in 2014, while some companies even switched to using coal instead of natural gas.

Meanwhile, Ukraine is set to reduce the amount of gas it imports in 2015, in response to its new geopolitical reality. Kiev is set to renew its price agreement with Gazprom in April, when a previously negotiated discount expires. The previous agreement was brokered by the European Union.