Russia's Gazprom issues May 7 ultimatum over Ukraine gas supplies

|By:, SA News Editor

Gazprom (OGZPY) is ratcheting up the pressure on Ukraine, issuing a May 7 ultimatum to settle $3.5B in unpaid debts or start paying in advance for its gas.

Alexander Medvedev, deputy chief executive, warns that Europe must help Ukraine pay the bill - plus a further $5B needed to refill storage facilities this summer - or face "severe problems” with gas supplies this winter.

By May 7, Ukraine would owe ~$3.5B for gas it has used in recent months, Medvedev says; if the country failed to pay, Gazprom would stop supplying it with gas for domestic use from June.

~30% of European gas comes from Russia, and roughly half of that passes through the Ukraine under transit agreements.