Russia warns Europe of possible gas disruptions over Ukraine

Gazprom turns to Stockholm court to sue Ukraine as it refuses to pay its outstanding bills of $4.5 billion.

MOSCOW: Russia warned Europe Monday of possible supply disruptions if Ukraine siphons off gas destined for the West, as it said it was seeking to recover $4.5 billion from Kiev in an arbitration court.

The state-controlled giant Gazprom took a step Monday toward cutting Ukraine's gas supply by requiring it to pay for the commodity ahead of time following the breakdown of talks.

"In full accordance with the existing contract Gazprom switched Ukraine's Naftogaz to a system of prepayment for natural gas supplies from 10am Moscow time," Gazprom said in a statement.

"From today, the Ukrainian company will receive Russian natural gas only in the amounts it has paid for."

"Gazprom has turned to the Stockholm arbitration court to sue Ukraine's Naftogaz for $4.5 billion", the company said in a separate statement, noting the Ukrainian firm had violated its contractual obligations by refusing to pay its outstanding bills.

Gazprom stressed however that for now gas for European clients was flowing via Ukraine without interruptions.

"Gas destined for European consumers is being supplied in full accordance with original contracts," Gazprom spokesman Sergei Kupriyanov told reporters on Monday.

Deputy Prime Minister Arkady Dvorkovich said that a further decision over Ukraine's gas supplies would be announced after Gazprom chief executive Alexei Miller holds talks with Russian President Vladimir Putin later in the day.

"Gazprom's chief executive and the energy minister should today report to the president and the government," the state ITAR-TASS news agency quoted Dvorkovich as saying.

Russian Energy Minister Alexander Novak and Gazprom's Miller are scheduled to address reporters at 1030 GMT.