Russia, Ukraine Reach Gas Deal

Russia Today: http://www.russiatoday.com/news/news/36049
January 18, 2009, 7:31
Russia gives a 20% discount to Ukraine to start the gas flow
Prime Ministers Putin and Timoshenko have finally reached an agreement in the gas dispute. Ukraine will enjoy a 20% discount to the market price in 2009 while Russia's transit fees will stay unchanged.

And by 2010 both countries will switch to full market price.

Tough talks

These talks werent easy - Timoshenko admitted, when the two prime-ministers came out to address to the media after hours of negotiations that didn't reach a conclusion until long after midnight.

Until the very last moment there were doubts just how much authority Timoshenko had to speak on behalf of Ukraine.

I hope she has a mandate, Yushchenko reassured me they have the same position, Russias President Dmitry Medvedev said earlier on Saturday.

The whole week conflicting statements were coming from the president and the prime-minister in Kiev. President Yushchenko refused to take part in the crisis energy conference in Moscow, Timoshenko readily took his place.

Understanding achieved

In the course of our negotiations we have managed to achieve an understanding that Russia and Ukraine will switch to the European pricing formula in our natural gas trade.

At the same time in 2009 we'll make a 20% discount for Ukrainian partners on the condition that Russia retains a discounted tariff for the transit of its gas to Europe through Ukraines territory in 2009 that is the same tariff paid in 2008.

At the same time we have agreed that starting from January 1, 2010 we'll completely switch to European pricing formula both for gas supply and for transit, Putin said following the talks.

Indeed, our talks were not easy, but we were able to reach an agreement, which will allow us to sign all the contract papers. We have instructed Naftogas and Gazprom chief executives to prepare all the paperwork no later then Monday according to the understandings we reached in our talks today.

Also immediately after all the papers are signed all gas supplies to Europe will be fully restored, Timoshenko agreed, adding that the day was very fruitful, and the summit that convened today yielded results.

The Ukrainian side has assured us that the transit will be restored in the nearest future, Putin concluded.