The deal creates a five year contract between the two sides and ends the bitter dispute that culminated in Gazprom cutting off Ukraine’s gas supply lines over the Christmas period.
We have reached a final agreement. It is successful for Gazprom and we are satisfied, the gas giant’s chief executive Alexei Miller told reporters in Moscow. This agreement will ensure stable supplies to Europe.
In the wake of the agreement being finalized, global oil prices fell by over $0.50 per barrel, with gas prices also set to stabilize. The agreement between Kiev and Moscow will see the Ukraine import a mixture of Russian and central Asian gas at a combined price of $95 per 1,000 cubic meters. However Gazprom will initially sell its gas to a trading company for $230 per 1,000 cubic meters, before the gas is sold on to Ukraine with the cheaper supplies from Turkmenistan.
The apparent end to the crisis will be warmly welcomed by western European states that had experienced supply interruptions as a result of Gazprom’s decision to switch off the flow to Ukraine. However the scale of the crisis has forced the issue of European energy supply security to the forefront of the political agenda, with EU ministers meeting in Brussels to discuss the issue as news of the agreement filtered through.
