Gazprom and Naftogaz are to formulate gas resumption agreement by Monday

The Russian and Ukrainian Prime Ministers Vladimir Putin and Yulia Tymoshenko have struck a deal at talks in Moscow to resume Russian natural gas exports to Europe via Ukraine. The two premiers agreed that Russia will give Ukraine a 20 percent discount on the gas purchase. In exchange, Ukraine will not hike the fees it charged Russia to transport gas onward to European countries. Under the deal, Ukraine will start paying for Russian gas at the much-higher European prices from next year. "Immediately after all the documents on the transit and purchase of gas are signed, all the routes for gas transit and gas supplies to Europe will be restored," Yulia Tymoshenko said. Gazprom and Naftogaz started to prepare the whole package of documents needed for gas resumption and are to formulate them by Monday, January 19, RIA Novosti quoted Gazprom spokesman Sergei Kupriyanov as saying Sunday. He 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,” Info-Prim Neo reports. After talks, Putin said they agreed that in 2009 Ukraine will have a discount of 20% on condition that the preferential tariff for piping Russian gas to European consumers through Ukraine in 2009 remains in force and that the price for piping will be the price of 2008. He also said that from January 1, 2010, they will entirely move to price and tariff formation fully in accordance with European standards without any exemptions or discounts as regards both the transit and the price of gas. Ukraine paid $179.5 per 1,000 cubic meters for Russian natural gas in 2008, which is less than half the price paid by European consumers. The European price for natural gas in the first quarter of this year stands at about $450 per 1,000 cu meters, but is expected to fall significantly later this year to reflect the decrease in world oil prices. Ukraine’s neighbors in the first half of 2009 will pay $470 per 1,000 cubic meters of Russian gas. The Government of Moldova does not yet have an official position on this subject. However, “the result was expected because when the Moldovan delegation was leaving Moscow, the sides were disposed to reach an understanding,” said the Government’s spokesman Vitalie Condraţchi. On Saturday, Prime Minister Zinaida Greceanii took part in the International Conference on Insurance of Delivery of Gas Supplies to Consumers in Europe held in Moscow. Gas supplies to Moldova were cut off on January 6 following the dispute between Ukraine and Russia. The Moldovan consumers are supplied with gas from the reserves of the Ukrainian state.