Russia's gas giant Gazprom has informed UkrTransGaz, a transit arm of the Ukrainian state-run Naftogaz firm, that it was seeking cancellation of a bilateral natural gas balancing agreement, Naftogaz said Thursday.
Naftogaz said in a statement that Gazprom was to terminate the deal on June 23.
Under the pact signed in 2010, Kiev agreed to provide the European countries with extra gas volumes from its underground storage facilities, if fluctuations in daily consumption on the European market arise.
For its part, Gazprom is obliged to compensate Naftogaz for additional gas supplies to Europe.
Naftogaz Chairman Andriy Kobolev said the Ukrainian side would "try its best" to ensure uninterrupted gas supplies to European consumers despite difficulties.
The Ukrainian gas transportation system, with a capacity of pumping up to 142.5 billion cubic meters of gas to European countries a year, transits around 60 percent of Russia's Europe-bound gas.