Gazprom CEO Alexei Miller yesterday sent a letter to the company's customers and partners informing them of the current status of discussions with Ukraine regarding its debt for gas received during 2008. Mr Miller explained Naftogaz Ukrainy has not responded to Gazprom's efforts to propose various solutions - including the suggestion of an upfront payment of the transit fees that Gazprom pays to transport gas to European customers via Ukraine. However as yet no way forward has been agreed and the bulk of the debt remains unpaid. Whilst sympathetic to Ukraine's economic difficulties, Gazprom is unable to sign a new contract with Naftogaz Ukrainy whilst this situation continues:

"OAO Gazprom has been helping and continues to help its Ukrainian partners as much as possible. The position of Naftogaz Ukrainy concerning the settlement of debts for the gas received remains extremely unconstructive."

However Mr Miller stressed that as a reliable supplier Gazprom would continue to provide gas to its European customers.

"Taking into account the foregoing risks caused by the Ukrainian side's noncompliance with its contractual obligations, I would nevertheless like to assure you that OAO Gazprom will fulfill all of its contractual obligations to its European partners in full."