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Moscow and Kiev clinch gas deal

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Moscow and Kiev clinch gas deal


Moscow and Kiev have reached an agreement to resolve their gas dispute. After marathon talks in Moscow, the chief executive of Russian state utility Gazprom Alexei Miller and his Ukrainian counterpart from Naftogas Alexei Ivchenko announced the accord. “I am very happy with the outcome of the negotiations,” Miller said. Gazprom got its way with a fourfold price increase to 230 dollars per thousand cubic metres – however Ukraine will not actually pay that initially, as Russian gas will be mixed with cheaper supplies from central Asia. That gives Kiev a price of 95 dollars.

The agreement is valid for five years. European Union energy officials meeting in Brussels have welcomed the news. The accord ends a row which culminated in Gazprom cutting supplies to Ukraine on Sunday after Kiev rejected the cost hike. Relations were further poisoned when the company accused Ukraine of siphoning off deliveries meant for consumers in Western Europe – a charge the Ukrainian authorities vigorously denied. The dispute came against the backdrop of political tensions dating back to Ukraine’s “Orange Revolution,” when President Viktor Yushchenko vowed to bring his country closer to NATO and the EU. Kiev suspects Russia is using the gas issue to undermine the government ahead of parliamentary elections.
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