Russia's Gazprom says can exempt rebel-held areas from Ukraine gas contract

The Gazprom logo is seen on the side of the company's headquarters in Moscow, February 24, 2015. REUTERS/Maxim Zmeyev

MOSCOW (Reuters) - Kremlin-controlled Gazprom said on Thursday it would exempt gas supplies to rebel-held regions from its main contract with Ukrainian Naftogaz, days before Kiev uses up gas volumes it has already paid for.

The dispute flared up last week when Gazprom said it started direct gas supplies to the regions of eastern Ukraine held by pro-Moscow rebels. Gazprom said Naftogaz would have to pay for these supplies to the rebel-held areas.