Europe's second-largest gas distributor after Gazprom (GAZP.RS), Norway's StatoilHydro (STO), said Saturday it will not be able to up production if the Russian giant halts deliveries to Ukraine or the E.U.

Europe's second-largest gas distributor after Gazprom (GAZP.RS), Norway's StatoilHydro (STO), said Saturday it will not be able to up production if the Russian giant halts deliveries to Ukraine or the E.U.

"In winter, we're more or less at full capacity. If there is a higher demand, we cannot really produce more," corporate affairs head Ola Morten Aanestad told AFP.

Norway is the world's third-largest gas exporter and the European Union's second most important supplier, behind Russia but ahead of Algeria.

Earlier Saturday, Gazprom spokesman Sergei Kupriyanov told radio station Moscow Echo there was a "50-50" chance that Russia will cut off gas supplies to Ukraine on Jan. 1 over Kiev's failure to pay its debts.

Ukraine is a major transit country for Russian gas exports to the European Union and a dispute over gas prices led to a brief interruption of gas supplies in several E.U. countries in January 2006.

Gazprom has said it will fulfill its obligations to Europe but has also warned it cannot rule out disruptions to European supplies if Ukraine siphons off transit gas during a crisis.

Norwegian gas exports having enjoyed exponential growth since the start of the millennium, from 50 billion cubic metres in 2000 to 81 billion in 2005 and an estimated 130 billion in 2010.