Yesterday Moscow and Kiev ended the gas row rather unexpectedly. The recent Gazprom ultimatum to cut off gas supplies to Ukraine resulted in Ukraine’s promise to pay off its debt and the revising the major gas supply scheme, worked out after the gas conflict of 2005-2006. The gas supply operators are to be changed; two joint companies of Gazprom and Ukraine’s Naftogaz will appear.

January 12, at the meeting of the Ukrainian and Russian presidents in Moscow the two sides have found a common solution of the Ukrainian debt problem. Ukraine will begin to pay off its gas debt to Russia starting February 24, 2008. The new supply scheme designed to simplify the process of gas import seems to be even more complicated as at the moment there are more questions then solutions. At that, regarding the conflict from political point of view, the Ukrainian president Viktor Yushchenko has been in advance of his opponent Prime-minister Yulia Timoshenko, who has tried to reset the gas supply chain herself.

Documents on the settlement of gas disputes between Russia and Ukraine would be signed over the next two days, Russian President told reporters. He said Gazprom had accepted Ukraine’s proposals to settle the issue. The Russian leader added that an agreement had been reached on the key principles of cooperation in the gas sphere in 2008 and for the short term.

According to the reached agreements, Ukraine will pay for the Russian gas supplied since January 1, 2008, at a price of $179.5 per 1,000 cubic meters of gas, and it will pay $130 per 1,000 cubic meters of gas for the gas supplied in November and December 2007. Yushchenko said Ukraine’s Naftogaz had not yet signed a contract for the gas deliveries in November and December 2007, and the payments would be based on the terms of the previous gas contract.

Gazprom and Naftogaz of Ukraine will consider the creation of a direct and transparent system of gas supplies, Ukrainian President Viktor Yushchenko told reporters in Moscow today. «We have agreed that Naftogaz and Gazprom would set up a working group to discuss the organization of simpler, direct and transparent relations in terms of market organization and supplies,” Yushchenko said.

Both sides agree, he said, that relations in the gas sphere should be made more transparent, “removing intermediaries who could have a negative impact on the relations.”

Ukraine had initiated the revision of the system of Russian gas supplies to Ukraine, seeking to remove the two intermediaries, RosUkrEnergo and UkrGazEnergo. Gazprom said it would consider direct contracts with Ukraine only after Ukraine paid its $1.5 billion debt for Russian gas supplies.

Sources:

    www.rian.ru

    www.rzn.info

    www.gzt.ru