Russia, Ukraine Reach Natural Gas Agreement

Russian gas to resume gas exports today
By Wesley Oliver,  Newser Staff
Posted Jan 18, 2009 11:05 AM CST
Russia, Ukraine Reach Natural Gas Agreement
About 80% of Gazprom's exports flow through Ukraine's natural gas pipeline network.   (AP Photo/Bela Szandelszky)

Russian gas will resume flowing into Ukraine’s domestic market today after the two countries settled their frosty dispute, the New York Times reports. As is customary for Western Europe, Kiev will now pay Moscow rates tied to the price of oil, but will receive a 20% discount, unlike Gazprom’s other European customers. Prices are expected to plummet this year.

It’s unclear how Ukrainian elites will receive the deal with Russia, which has sought to undermine the country’s president. Nonetheless, an analyst called the agreement “a major step forward” because the discount “makes it easier to transfer to world market price levels.” The rate, $208 to $240 for 1,000 cubic meters of natural gas, is similar to Ukraine’s pre-dispute offer.
(More Russia stories.)

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