Russia, Ukraine PMs say reach gas deal

The prime ministers of Ukraine and Russia said on Sunday they had reached an outline deal to restore gas supplies to European consumers.

Russia, Ukraine PMs say reach gas deal
The prime ministers of Ukraine and Russia said on Sunday they had reached an outline deal to restore gas supplies to European consumers after marathon talks which dragged on into the small hours of the morning.

"Gas transit, the Ukrainian side assured us, will be restored very soon," Russian state channel Vesti-24 showed Russian Prime Minister Vladimir Putin saying in a brief statement after the drawn-out talks.

Putin, standing next to his Ukrainian counterpart Yulia Tymoshenko, said Moscow had agreed to make a 20-percent discount for Kiev from a price European consumers pay, "on condition Kiev keeps preferential tariffs for Russian gas transit to Europe across Ukraine in 2009 at last year's level".

"We also agreed that starting Jan. 1, 2010 we will fully move to gas prices and transit tariffs in line with European levels without any reductions and discounts," Putin said.

Tymoshenko said: "We ordered the heads of Naftogaz and Gazprom to prepare by Monday the whole package of documents and formulate them the way it was agreed during today's talks."

"Once all the documents on gas transit and gas purchases have been signed, gas transit to Europe will be fully restored."

Gazprom spokesman Sergei Kupriyanov told local channels Russia's gas export monopoly and Ukraine's Naftogaz "are now drawing up an agreement on gas supplies to Ukrainian consumers and gas transits". Naftogaz offered no comment.

Putin and Tymoshenko were under intense pressure from the European Union to resolve the dispute, which has cut gas supplies to much of eastern Europe since Jan. 7 and damaged both countries' reputations as reliable energy partners.

While Putin, Russia's paramount leader, had full authority to seal an agreement, it remained unclear whether Tymoshenko's domestic political rival Viktor Yushchenko would respect the deal reached in Moscow.

Last October, Tymoshenko and Putin clinched a deal calling for a three-year transition period after which Ukraine would pay market prices.

President Yushchenko had no objections to that deal and said repeatedly Ukraine must be prepared to pay market prices, while saying a formula had to be found to determine the price.

Yushchenko and Tymoshenko had disagreed on some negotiating tactics in the final run-up to the deal, notably on whether a deal for Ukraine and transit to Europe should be separate.

The frantic all-night talks followed a summit in Moscow of gas-consuming nations at the Kremlin on Saturday afternoon which failed to resolve the dispute.

Russia cut off supplies to Ukraine on Jan. 1 because it would not pay higher prices for its gas. Six days later, export flows to eastern Europe through Ukraine ceased amid Russian accusations that Kiev was "stealing" gas intended for export.

After the Kremlin meeting, Medvedev reiterated Moscow's position on the issue at the heart of the dispute, saying that Kiev had to pay European prices for gas supplies, more than double current levels.

"There is nothing damaging about that. It's the money our other partners pay and Ukraine is in a position to pay it," Medvedev told a news conference.

Kiev, whose crisis-gripped economy is forecast to contract by up to 5 percent this year, says it cannot afford such high prices and wants Russia to pay higher transit fees for gas it exports through Ukraine.

Last Mod: 18 Ocak 2009, 15:56
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