Ukraine signs off on gas supply deal

By Aussiegirl

Ukraine has signed off on a new deal with cements the price of natural gas at $95 until 2010 instead of the only six month guarantee that prevailed before. Looks like things have settled down for now. Now we await the results of the upcoming elections to see if the Orange revolution goes ahead or gets squeezed.

Here's the report from Business Week:

Ukraine signs off on gas supply deal

Ukraine signed off on a deal Thursday that will provide it with some of the cheapest supplies of imported natural gas in the former Soviet Union, ending what had been a bitter feud with Moscow over prices.

Under the deal, Ukraine will receive 34 billion cubic meters of Russian and Central Asian gas this year at a price of US$95 (euro78) per 1,000 cubic meters, state-controlled gas company Naftogaz said -- a nearly twofold increase for Ukraine but far less than the US$230 (euro190) it would pay if it was getting only Russian gas.

The deal also stipulates that Ukraine will receive up to 60 billion cubic meters of gas annually at the same price through the end of 2010, Naftogaz spokesman Eduard Zaniuk said.




"All the documents were signed today, the talks are officially over," Zaniuk said at a brief news conference after three days of tense talks. "It is the lowest price for all post-Soviet countries except Belarus."
The agreement appears to represent a major victory for Ukraine, which initially had been promised the US$95 price only for the first six months of this year. Naftogaz insisted that it did not surrender control over any of the country's lucrative pipelines, which pump Russian gas on to Europe, or its vast underground gas storage tanks to cement the deal.

The deal came nearly a month after Russia and Ukraine reached a framework agreement to settle a bitter price dispute that caused a temporary drop in supplies to Europe when Russia turned off the taps to Ukraine, sparking concerns about energy security across the continent.