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Ukraine mulls Russian sanctions

Brussels - Ukraine's parliament backed the first reading of a bill to impose sanctions on Russian companies and individuals on Tuesday, a move that has raised concerns in Europe about energy supplies from Russia.

Ukraine's Prime Minister Arseny Yatseniuk said last week that the sanctions could be imposed against 172 citizens of Russia and other countries and against 65 Russian companies, including gas export giant Gazprom, "for financing terrorism".

Ukraine said on Monday that European energy companies would have to agree major contract revisions when purchasing Russian natural gas if parliament approved imposing sanctions on Gazprom.

Russia is Europe's biggest gas supplier, meeting almost a third of the region's demand, around half of which flows to European clients via Ukraine.

European utility companies are worried that Ukrainian sanctions could disrupt supplies during the upcoming peak winter season.

Ukraine's gas grid Naftogaz said on Monday that the sanctions could limit or even exclude some companies from piping gas through the country, but did not refer directly to Gazprom. It said this would allow other firms to take over transit operations in Ukraine.

"The main idea is (that) transit could continue with no problems if this gas is bought at our eastern border (with Russia) by, let's say, European companies," said a Naftogaz spokesperson.

Current supply contracts with European utilities are for delivery of Russian gas into the EU via Ukraine, with Naftogaz receiving a transit fee.

The European Union said gas contracts may need to be renegotiated.

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