Russia has agreed to restart gas supplies to Ukraine as both the countries reached a compromise deal over unpaid bills and gas prices.
Both the countries agreed for a $4.6bn winter package following seven rounds of gas negotiations with the European Commission (EC).
The winter package comprises two documents which include a binding protocol, signed by the European Commission, Russia, and Ukraine, as well as an addendum to the existing gas supply contract, signed by Russia’s Gazprom and Naftogaz of Ukraine.
The package, which runs until the end of March 2015, allows Ukraine to order as much as gas required.
Ukraine, which is planning to purchase 4 bcm until the end of 2014, needs to pay its debts based on a preliminary price of $268.5/1000m3 in two tranches, $1.45bn without delay, and $1.65bn by the end of 2014.
Russia will supply gas following advanced, monthly payments by Ukraine.
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By GlobalDataThe price is below $385/ 1000m3 and calculated according to a formula in the existing contract and a price reduction via a discount in export duties by the Russian Federation.
EC president José Manuel Barroso said: “With our strong support, Ukraine and Russia have today found agreement on their outstanding energy debt issues, and on an interim solution that enables supplies to continue this winter.”
EC vice-president Günther Oettinger said: “This breakthrough will not only make sure that Ukraine will have sufficient heating in the dead of the winter. It is also a contribution to the de-escalation between Russia and Ukraine.”
