Ukraine 'steals gas owned by EU' says Russia

European countries began to suffer from reduced gas supplies yesterday after Russia cut deliveries to Ukraine in a contract dispute.

The Czech Presidency of the European Union said it would call a crisis meeting of envoys in Brussels on Monday and demanded that existing gas supply deals be honoured.

"We feel that the situation has now escalated to a point that substantiates an extraordinary meeting," Czech presidency spokesman Radek Honzak said. Talks would also probably be called soon with Moscow, another spokesman said.

"Energy relations between the EU and its neighbours should be based on reliability and predictability," the presidency said in a statement.

"Existing commitments to supply and transit have to be honoured under all circumstances."

Russia's gas export monopoly Gazprom accused Ukraine of stealing gas in transit. Gas importers in Romania, Hungary and Poland said pressure on their pipelines had dropped.

"Gas inflows from import fell by 30 to 40 percent ... This is because of Ukraine's dispute with Russia," Romania's state-controlled pipeline operator Transgaz director Ioan Rusu told Reuters by telephone.

There were similar reports of less steep supply falls from Budapest and Warsaw.

"Pressure started to decline at 1500 GMT. Pressure is declining continuously. However, the drop has not yet reached a critical level," Edina Lakatos, a spokeswoman for the Hungarian energy company MOL's natural gas transmission subsidiary, said.

Ukraine's state energy firm Naftogaz denied it was illegally siphoning off Russian gas.

Gazprom's accusation suggested Moscow was in no mood for compromise in a re-run of a 2006 argument that led to supply shortages across the EU.

"The Ukrainian side openly admits it is stealing gas and is not ashamed of this," Gazprom spokesman Sergei Kupriyanov said, adding that Gazprom had increased exports to Europe via an alternative route - Belarus.

Poland said deliveries from Ukraine had dropped six percent but were being made up by deliveries through Belarus.

"The change in deliveries is not being felt by Polish natural gas consumers," said gas operator Gaz System and gas monopoly PGNiG in a joint statement.

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