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Russia, Ukraine Sign Compromise Gas Deal


Russia and Ukraine have signed a new compromise deal under which Kyiv will buy Russian natural gas at discount prices.

Officials from both countries say the agreement -- signed Tuesday in Moscow - guarantees Ukraine 55 billion cubic meters of gas next year, at prices no higher than $130.00 per 1,000 cubic meters. Kyiv currently pays $95.00 per 1,000 cubic meters.

The deal - announced as prime ministers of both countries met in the Ukrainian capital - appears to end uncertainty over Russian gas supplies both to Ukraine and to European customers in the coming winter months.

A pricing disagreement late last year led Moscow to cut gas supplies to Ukraine in January. The temporary cut also affected parts of Europe, prompting widespread criticism of Russia as an unreliable energy partner.

Analysts have widely speculated that a compromise deal for Ukraine would come at a political price, with Moscow expecting Ukrainian Prime Minister Viktor Yanukovych, who seeks closer ties with Russia, to possibly slow or reverse Kyiv's push to join NATO.

Reformist President Viktor Yushchenko has sought to distance Ukraine from Russia and has pushed for entry into NATO and the European Union.

Some information for this report was provided by AFP, AP and Reuters.

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