Gazprom supplies Europe with a quarter of its gas

The profit boost largely came from sales of financial assets and a pension-related accounting gain.

Price increases helped offset a drop in demand during a warm winter in Europe.

Last week, Gazprom threatened to cut gas supplies to Ukraine over an unpaid debt, renewing fears about Russia's reliability as energy supplier.

The world's biggest gas producer reported a net profit of 210bn roubles ($8.4bn; £4.1bn) for the first quarter of 2007 from $185bn roubles in the same period a year earlier.

One-time gain

State-owned Gazprom said changes to Russian accounting rules led to a one-time gain of 44.7bn roubles from its pension fund.

Sales climbed 4.4% to 612bn roubles as rising prices in Europe and in the countries of the former Soviet Union helped offset a fall in demand.

Gazprom, which supplies a quarter of Europe's gas, has said it does not make a profit on gas sales at home as the government caps domestic prices to subsidise industries.

Export sales volumes fell to 39.9bn cubic metres from 45.6bn during the much colder first quarter of 2006.