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Russia threatens to cut off gas supply to Ukraine by June 3

 
 
 
 
 
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Russia has set a deadline for Kiev to pay part of its debt to Moscow or the flow of Russian gas to Ukraine will be halted.

The acting Kiev government has until June 3 to pay part of its debt or face cuts in natural gas supplies from Russia.

According to Russia’s Gazprom CEO Alexey Miller, with last month’s consumption included, Ukraine’s debt will rise to USD 5.2 billion by June 7.

Russia has stated that Ukraine should make advance payments for gas imports from June.

Negotiations between Russia and Ukraine aimed at ending the dispute over gas payments failed on May 30.

Following the talks, Ukraine’s Energy Minister Yuri Prodan said Kiev had made a payment of USD 786 million to the Russian gas giant for earlier delivered gas, without clarifying further.

If Gazprom were to receive the payment, which was scheduled to be deposited to the company’s account on Monday morning, then negotiations between the two sides would continue in Brussels later in the day. It is not clear if that would forestall a cutoff, either.

Meanwhile, a number of European countries have offered to supply Ukraine with reverse-flow gas, but the deliveries would not be enough to satisfy Ukraine’s gas needs.

The International Monetary Fund has also approved a USD 17-billion bailout package for Ukraine. Part of the IMF money is aimed to settle Kiev’s debt to Gazprom for natural gas and pay for future imports.

Russia provides about half of Ukraine’s and 30 percent of Europe’s total gas demand with major pipelines in the Ukrainian territory.

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