And then there was gas

Ukraine and Russia will sign the agreement about the deliveries of natural gas to Ukraine and the conditions of the Russian gas transit to Europe on January 19. The news was unveiled after five-hour negotiations between Russian Prime Minister Vladimir Putin and his Ukrainian counterpart, Yulia Tymoshenko, in Moscow.

“The talks were not easy, but we came to consent, which allowed us to sign all necessary documents,” Tymoshenko told reporters.

Naftogaz and Gazprom have already received adequate directions to prepare the documents to sign the contract. Tymoshenko stressed out that gas shipments to Europe would be resumed immediately after the contract was signed.

Russia and Ukraine will proceed to the European formula of price determination as far as the gas issues were concerned, the official website of the Ukrainian government said with reference to Vladimir Putin.

“He also said that the sides agreed to provide a 20-percent discount for Ukraine in the event the reduced rate to transit gas to European customers was kept in 2009 on the level of 2008. Putin added that Ukraine and Russia would use European standards of price formation in January 2010, the press service of the Ukrainian government said.

Tymoshenko and Putin agreed to sign a direct contract between Gazprom and Naftogaz. RosUkrEnergo – the company that acted as a mediator between the two countries for many years – will be removed from the contract. A source from the Russian government also said that the international monitoring of gas shipments to Ukraine would be stopped. “The sides will be able to control all the issues themselves after the contract is signed,” the anonymous source said.

Putin also said that Ukraine had become the last country of the former USSR with which Russia starts using market conditions in the gas field.

“Tymoshenko’s form of compromise allowed to save Ukraine’s face and will contribute to the development of transparent market relations in the Ukrainian gas business. It is not our business, but it meets Ukraine’s long-term interests,” the source at the Russian government said.

Putin and Tymoshenko signed the papers January 19. The crisis has been solved.

Author`s name Dmitry Sudakov