Putin Threatens To Cut Ukraine Gas Supplies

Failure by Ukraine to pay, Putin said, could hurt transit flows to Europe.

Russian Prime Minister Vladimir Putin warned that Moscow would halt gas deliveries to Ukraine if payment were not received by Saturday, and this could also affect supplies to Europe.

Ukraine is the main transit route for Russian gas exports to Europe, and a dispute over prices with Russia in January disrupted supplies to many countries at the height of winter.

Failure by Ukraine to pay, Putin said, could hurt transit flows to Europe.

"If as a result of law enforcement actions and arrests of a number of officials there will be no payment (for Russian gas deliveries), it will lead to the stoppage of our energy deliveries to our customers in Ukraine as well as customer in Europe," Putin said in Moscow on Thursday.

He was speaking after Ukraine's SBU security service tried on Thursday to gain entry to the offices of the authority overseeing Ukraine's gas pipelines, but later left the building.

It was the second such incident in as many days apparently connected to Ukraine's gas deals with Russia.

The raids also served to highlight worsening tension between Ukrainian President Viktor Yushchenko and Prime Minister Yulia Tymoshenko -- former allies now at loggerheads.

On Wednesday, armed SBU officers burst into the offices of Ukraine's national energy company Naftogaz as part of investigations into what it said were abuses -- as the firm was making arrangements to settle a critical bill for Russian gas.

Naftogaz said it had paid 80 percent of the February gas bill to Russia and would settle the rest on Thursday.

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A spokeswoman for the Ukrtransgaz company that runs Ukraine's pipelines said a group of men in civilian clothes and apparently unarmed had demanded entry to the building. She said the group presented no documents or warrants.

A Naftogaz spokesman, Ilya Savin, said the group left the company's premises after about an hour after a standoff with members of parliament who had rushed to the scene.

SBU spokeswoman Maryna Ostapenko had earlier said SBU officers were conducting an investigation "within the framework of a criminal case over abuses in the gas sector".

Timoshenko, addressing her cabinet, said the security forces were out of control and acting at the president's behest.

"...The prosecutor's office is doing nothing because it has its own interests, the SBU is blatantly breaking the law and the president is covering up for them," she said.

"This is not merely a violation of the constitution, but in essence the destruction of the very foundation of the state's legal norms."

Yushchenko's spokeswoman on Wednesday said the SBU's first raid on Naftogaz had acted within the law.

Yushchenko has criticised the prime minister for her conduct in clinching a deal in January under which Ukraine is to pay far more for imported Russian gas.

Tymoshenko initially said Wednesday's action by security forces was part of a new row over the takeover by customs of 11 billion cubic metres of gas from RosUkrEnergo, an intermediary eliminated from the gas trade under the latest deal.

On Wednesday, SBU officers in riot gear pushed their way into Naftogaz offices, conducting a search for what company officials said were the original copies of a gas supply deal signed in January with Russian giant Gazprom.

Naftogaz said they left hours later without the documents.

Ukraine's key industries and its currency have been battered by the financial crisis. Yushchenko and Tymoshenko briefly abandoned their antagonism this week to make a joint submission to the International Monetary Fund to keep intact a $16.4 billion loan programme.