MOSCOW - The head of Russia's natural gas giant Gazprom said on Tuesday he did not expect a new gas war with Ukraine to erupt over the New Year, echoing an earlier statement from the Russian Energy Ministry.

We don't expect any conflicts and problems with payments (from Ukraine for Russian gas), Gazprom Chief Executive Alexei Miller told reporters.

He also said that Gazprom's gas production will decline by about 90 billion cubic metres (bcm) this year to over 460 bcm.

A dispute between Russia and Ukraine led to gas supplies to Europe being cut off in January 2009, leaving millions of homes without heat at the height of winter and damaging the industry. Europe receives a fifth of its gas from Russia via Ukraine.

Earlier on Tuesday, Russian Energy Minister Sergei Shmatko also said he did not expect any spat between Moscow and Kiev over gas supplies.

There is no basis for any sort of sensation around New Year. There is no basis to expect that problems will arise, Shmatko told a news briefing.

Miller also said that Gazprom saw no obstacles to financial crisis-hit Kiev paying in full for December gas deliveries.

We don't have any grounds to believe that something critical may happen with payments for Russian gas deliveries in December, he said.

Ukraine has been paying the bills for Russian gas on time but Moscow had been voicing concern that Kiev will not be able to do so because it was severely hit by the world-wide economic downturn.

(Reporting by Gleb Bryanski and Anton Doroshev; writing by Vladimir Soldatkin, editing by Keiron Henderson)

Russia Energy Ukraine