May 5, 2014 / 2:58 PM / 5 years ago

UPDATE 1-Russia stops diesel shipments via pipeline to Ukraine, Hungary

* Pipeline meets about a third of Ukraine diesel demand

* Hungary received 815,000 t diesel via pipeline in 2013 (Adds detail)

By Vladimir Soldatkin

MOSCOW, May 5 (Reuters) - Russian pipeline monopoly Transneft stopped diesel shipments to Ukraine and Hungary last month due to uncertainties over the pipe’s ownership, a company spokesman said on Monday.

The pipeline crosses Belarus and Ukraine and is the only one carrying Russian oil products to Hungary.

Flows via the pipeline, which was built in Soviet times and meets around a third of Ukraine’s diesel demand, have been suspended as violence in Ukraine plunge East-West relations to their lowest since the Cold War.

However, Transneft said its decision was unrelated to the Ukraine crisis.

Spokesman Igor Dyomin said Transneft started work to mothball the pipeline just before an April 25 court hearing in Ukraine, in which the Ukrainian prosecutor’s office claimed ownership over the pipeline.

Dyomin said the case was closed though uncertainty remained as the plaintiff had 20 days to appeal.

Russia, the world’s top oil producer, has often used the threat of supply cuts in pricing rows with its neighbours. Russian President Vladimir Putin has said Moscow could stop natural gas flows to Ukraine, which would lead to cuts in onward deliveries to Europe, unless Kiev settles an unpaid bill.

Dyomin said that following the court decision, the Ukrainian Energy Ministry asked for consultations “to resolve all issues concerning the operation of the pipeline,” and that Transneft hoped for a meeting this week.

The pipeline shipped some 1.7 million tonnes (over 30,000 barrels per day) of oil products last year.

In 2013, the pipeline carried 925,000 tonnes of diesel for Ukraine’s domestic market, while 815,000 tonnes were shipped to Hungary.

Russia’s diesel exports to Hungary stood at 65,000 tonnes in March. Almost 30,000 tonnes of diesel was shipped to Ukraine in March, down over 40 percent, month-on-month.

Ukraine is not a key transit route for Russian oil exports to Europe, unlike shipments of natural gas. Russia mainly exports oil by sea.

“At the moment, we are trying to figure out our position about the pipeline’s future,” the Transneft spokesman said. (Reporting by Vladimir Soldatkin, editing by Nigel Stephenson)

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