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Russian gas to flow again shortly Gas to flow after deal in Moscow
(about 1 hour later)
Russian Prime Minister Vladimir Putin has said agreement has been reached at talks in Moscow to resume gas exports to Europe via Ukraine shortly. The Russian and Ukrainian prime ministers have struck a deal at talks in Moscow to resume Russian natural gas exports to Europe via Ukraine shortly.
Ukrainian PM Yulia Tymoshenko said gas supplies would resume as soon as the two countries' energy companies drew up contracts, Russian media report. Vladimir Putin and Yulia Tymoshenko emerged to brief reporters, ending a day of delicate talks.
The gas dispute between Moscow and Kiev has crippled supplies of Russian gas to much of central and eastern Europe. They said that from next year, Ukraine would start paying for Russian gas at the much-higher European prices.
The parties were under pressure from Brussels to reach a deal this weekend. The dispute between Moscow and Kiev has disrupted gas supplies to much of Europe for almost two weeks.
See map of affected area See map of affected area
"In the very near future, transit - and the Ukrainian side has assured us to this effect - will resume," said Mr Putin, speaking alongside his Ukrainian counterpart on Russian TV.
Mrs Tymoshenko said that the two countries' energy companies, Gazprom and Naftohaz, had been instructed to draw up the relevant contracts by Monday.
"Immediately after all the documents on the transit and purchase of gas are signed, all the routes for gas transit and gas supplies to Europe will be restored," she said.
"I believe today has been a fruitful day... Mutual understanding has been found."
EU pressure
The parties were under pressure from Brussels to reach a deal this weekend.
European Commission spokesman Johannes Laitenberger had said the Moscow talks offered "the last and best chance for Russia and Ukraine to demonstrate they are serious about resolving this dispute".
"The gas must flow," he added. "We will regard this period as a test case for judging whether or not they are credible partners."
EU states import a quarter of their gas from Russia and 80% of supplies come via Ukraine. Almost 20 countries in Europe have been affected by the dispute.EU states import a quarter of their gas from Russia and 80% of supplies come via Ukraine. Almost 20 countries in Europe have been affected by the dispute.
Russia switched off the gas this month, accusing Ukraine firstly of failing to pay for its own supply, then later of stealing gas meant for other countries.Russia switched off the gas this month, accusing Ukraine firstly of failing to pay for its own supply, then later of stealing gas meant for other countries.
Some central and east European states have been reduced to rationing gas, while others have been seeking alternatives to the Ukrainian pipelines.Some central and east European states have been reduced to rationing gas, while others have been seeking alternatives to the Ukrainian pipelines.
An emergency summit called by Russian President Dmitry Medvedev for Saturday ran into difficulty after EU leaders heeded a call by the Czech Republic, which holds the EU's rotating presidency, to stay away in order for Brussels to speak with one voice. The gas dispute created the EU's worst ever energy crisis, the BBC's Richard Galpin reports from Moscow.
The gas dispute has created the EU's worst ever energy crisis, the BBC's Richard Galpin reports from Moscow.
Ukrainian divisionsUkrainian divisions
Saturday's talks opened with a meeting between Mrs Tymoshenko and Russian Prime Minister Vladimir Putin. At his news conference with Mrs Tymoshenko, Mr Putin said that discounts for both Russian gas supplied to Ukraine and the transit rate charged by Kiev would remain in place for the current year.
No EU head of state attended the Moscow gas summit "We agreed that in 2009 our Ukrainian partners will have a discount of 20% on condition that the preferential tariff for piping Russian gas to European consumers through Ukraine in 2009 remains in force and that the price for piping will be the price of 2008," he said.
Officials from Russia's Gazprom and Ukrainian state energy company Naftogaz later joined them at government house and the talks dragged into the night. "We also agreed that from 1 January 2010 we will entirely move to price and tariff formation fully in accordance with European standards without any exemptions or discounts as regards both the transit and the price of gas."
European-level prices for gas supplies will mean, at current rates, a jump from $179.5 per 1,000 cubic metres to $450 for Ukraine.
On the eve of the talks, sharp divisions emerged between Ukraine's president and prime minister, political foes in a fragile coalition government.On the eve of the talks, sharp divisions emerged between Ukraine's president and prime minister, political foes in a fragile coalition government.
Mr Yushchenko's office insisted the Moscow talks must combine gas supplies to Ukraine with transit supplies to Europe in "a single package".Mr Yushchenko's office insisted the Moscow talks must combine gas supplies to Ukraine with transit supplies to Europe in "a single package".
Mrs Tymoshenko for her part said: "The Ukrainian government does not link the issue of concluding an agreement on [Russian] gas supplies to Ukraine with the issue of resuming gas transit to Europe."Mrs Tymoshenko for her part said: "The Ukrainian government does not link the issue of concluding an agreement on [Russian] gas supplies to Ukraine with the issue of resuming gas transit to Europe."
"Simply speaking, I need two things: Don't throw a spoke in the wheel and don't stab any backs," she said before leaving Kiev. There was no immediate reaction to Saturday night's deal from Mr Yushchenko.
'Last chance'
Speaking after the summit, which was attended by the Czechs and non-EU states which also receive Russian gas, President Medvedev said he was certain the transit dispute would be resolved "in the nearest future".
Ukrainians burn a poster of Mr Putin as a Gollum figure turning off a gas pipe
He also reiterated Moscow's position that Kiev had to pay European-level prices for gas supplies - a jump from $179.5 per 1,000 cubic metres to $450.
"There is nothing damaging about that - it's the money our other partners pay and Ukraine is in a position to pay it," he said.
Ukraine, which is gripped by an economic crisis, has said it cannot afford such high prices and wants Russia to pay higher transit fees.
Russia is seeking a deal with EU firms to cover part of the cost of pumping gas from Russia to Europe.
In Brussels, the Czech presidency urged both sides to reach a deal.
Earlier, European Commission spokesman Johannes Laitenberger said the Moscow talks offered "the last and best chance for Russia and Ukraine to demonstrate they are serious about resolving this dispute".
"The gas must flow," he added. "We will regard this period as a test case for judging whether or not they are credible partners."
  
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