Dec. 28 (Bloomberg) -- Russian Prime Minister Vladimir Putin and his Ukrainian counterpart Yulia Timoshenko discussed energy supplies as Russia considers cutting off fuel shipments to the former Soviet state for the second time in three years.

Putin and Timoshenko held a telephone call yesterday, the Russian government said on its Web site, without providing any details. OAO Gazprom, Russia’s gas-export monopoly, will have “no legal grounds” to deliver gas to Ukraine as of Jan. 1 if an agreement over Ukraine’s debt to Gazprom isn’t reached by then, Chief Executive Officer Alexei Miller said Dec. 26.

Moscow-based Gazprom supplies one-fourth of Europe’s gas, mainly through Ukraine’s pipeline system. The company refuses to sign a new delivery contract with Ukraine until it pays off a debt of $2.1 billion. Gazprom curtailed deliveries in January 2006 after a price dispute. That led to natural-gas shortfalls throughout Europe and called into question Russia’s reliability as an energy supplier.

Ukraine may be able to avoid a shutoff of Russian natural gas by settling its debt to Gazprom through deductions from future transit fees that Ukraine charges Russia for transporting gas to Europe, Gazprom spokesman Sergei Kupriyanov said on Ekho Moskvy radio yesterday. There is about a 50 percent chance that Gazprom will end supplies of gas to Ukraine on Jan. 1, which is the deadline for an agreement, Kupriyanov said.

Relations Strained

Russian President Dmitry Medvedev threatened Dec. 24 to sanction Ukraine if the debt isn’t paid “to the last ruble” by next week. Speaking in an interview broadcast on state- controlled television channels, he said relations with Ukraine have reached the lowest point over the past few years and the neighboring country “lacks efficient leadership.”

Viktor Zubkov, Gazprom’s chairman and Putin’s deputy, said Dec. 22 that Ukraine should be held “fully responsible” for any possible disruption of Russian gas shipments to Europe.

“Ukraine has given guarantees for stable transit and we are ready to reiterate them,” Oleksandr Shlapak, first deputy head of Ukrainian President Viktor Yushchenko’s staff, said that day.

Ukraine’s state-run energy company NAK Naftogaz Ukrainy has about 17 billion cubic meters of gas in storage, while other companies have more than 11 billion cubic meters, Naftogaz Deputy Chief Executive Officer Volodymyr Trikolich said this month.

To contact the reporter on this story: Maria Ermakova in Moscow at mermakova@bloomberg.net.

Last Updated: December 28, 2008 11:06 EST