WRAPUP 1-No deal in Russia-Ukraine gas row, supply cuts loom

By Dmitry Zhdannikov

MOSCOW, Feb 11 (Reuters) - Russia was hours away from cutting gas supplies to Ukraine by a quarter but granted a brief extension to its deadline after last ditch talks on Monday failed to resolve a debt dispute.

Russia supplies a quarter of Europe's gas, most of it via Ukraine, and European customers are hoping the row will not escalate into a repeat of winter 2006, when a pricing dispute between Moscow and Kiev disrupted shipments to Europe.

Both Ukraine and Russia have assured Europe that gas flows westward will not be interrupted.

Russian gas export monopoly Gazprom (GAZP.MM: Quote, Profile, Research) has said it will on Tuesday cut a quarter of the gas it ships to Ukraine if Kiev does not settle in full a $1.5 billion debt for earlier supplies.

Ukraine's pro-Western Prime Minister Yulia Tymoshenko, who clashed with Russia over gas during her previous stint in office, blamed Russian-imposed gas traders for racking up the debt and said Kiev could not pay it in full right away.

Talks in Moscow between Gazprom negotiators and officials from Ukraine's state-owned energy company Naftogaz ended on Monday without a deal. "The talks are to continue on Tuesday," a Naftogaz spokesman said.

A rare visit to Moscow on Tuesday by Ukrainian President Viktor Yushchenko could be Kiev's last chance to avert a cut in supplies.

He is to meet his Russian counterpart Vladimir Putin in the Kremlin for a visit scheduled before the gas row broke out.