New attempted raid on Ukraine gas offices

KIEV/MOSCOW-State security officials tried on Thursday to stage a raid for the second straight day on Ukraine's gas industry, heightening long-running tensions between the president and prime minister.A similar raid on Wednesday by armed SBU officers on the offices of national energy company Naftogaz as the firm was making arrangements to settle a critical bill for Russian gas revived feuding between President Viktor Yushchenko and Prime Minister Yulia Tymoshenko. Russian Prime Minister Vladimir Putin briefly waded into the dispute on Thursday by threatening a new cutoff of gas if Ukraine failed to pay.But within hours Moscow said Ukraine had settled the bill for February gas totaling $360 million. Naftogaz said it had paid 80 percent of it a day earlier before a Saturday deadline.The SBU reports to the president and Yushchenko backed the initial action by its forces as a lawful criminal investigation. Tymoshenko, once a close ally and now a rival of Yushchenko for the presidency, said it threatened Ukraine's legal system.A Naftogaz spokesman said SBU officials tried on Thursday to gain entry to Ukrtransgaz, the offices of the company overseeing Ukraine's pipelines. They later left after a confrontation with members of parliament who rushed to the scene.Putin, addressing his government, said failure by Ukraine to pay could prompt Gazprom to curtail supplies, as it did for three weeks in January, and again cut off customers in Europe."If as a result of law enforcement actions and arrests of a number of officials there will be no payment, it will lead to the stoppage of our energy deliveries to our customers in Ukraine as well as customer in Europe," Putin said. 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.
EU CONCERN
European Union Commission President Jose Manuel Barroso later voiced concern over the Russian president's warning. EU countries have called for closer coordination between Kiev and Moscow to rule out any further cutoff of supplies.SBU spokeswoman Maryna Ostapenko had earlier said the two SBU operations were conducted as part of an investigation connected to "abuses in the gas sector."Tymoshenko, 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 criticized 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 row over the takeover by customs of 11 billion cubic meters 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 the January deal.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 program.
(Aditional reporting by Natalya Zinets and Mikhail Yelchev)
(Editing by Richard Balmforth)
By Ron Popeski and Aleksandras Budrys
http://news.yahoo.com/s/nm/20090305/wl_nm/us_ukraine_russia_gas_2
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