Russia, Ukraine and EU sign gas supply deal

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Russia, Ukraine and EU sign gas supply deal

Russia, Ukraine and EU sign gas supply deal
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Russia, Ukraine and the European Union have signed a deal to resume vital Russian gas supplies to Ukraine in return for payments funded by Kyiv’s Western creditors.

Moscow cut the gas flow in June over unpaid debts and a disagreement over the price.

Pressure had been mounting to clinch a deal as temperatures started to drop below freezing.

Worth 4.6 billion dollars (3.6 billion euros), the package calls for Ukraine to pay 3.1 billion dollars (2.5 billion euros) in two installments by the end of the year to cover debts for previous supplies from Russia’s Gazprom.

Kyiv will have 1.5 billion dollars (1.2 billion euros), some from existing agreements with the EU and International Monetary Fund (IMF), to pay for about 4 million cubic metres of gas until March, for which Russia requires payment up front.

“Unprecedented levels of EU aid will be disbursed in a timely manner, and the IMF has reassured Ukraine that it can use all financial means at its disposal to pay for gas,” the European Commission said in a statement.

Speaking about the deal, Yuriy Prodan, Ukrainian Energy Minister, said: “We have adopted an interim decision, some preliminary agreements, that will be in force until the final solution of our gas dispute with Russia, which will take place in a Stockholm arbitration court.”

Alexander Novak, Russian Energy Minister said:“On many matters, Russia has compromised on the price and the structuring of the debt. This is our contribution to the compromise to stabilise the situation in Ukraine so that the autumn and winter period is safe and the supply to European customers is stable.”

Guenther Oettinger, the EU’s Energy Commissioner described the agreement as a “first glimmer” that tensions are easing between Moscow and Kyiv.

He said the conflict has plunged East-West relations into a chill not seen since the Cold War.

Russia provides around one third of Europe’s gas supplies. Oettinger told a news conference that “there is now no reason for people in Europe to stay cold this winter.”