Gas flow to Europe resumes

It comes just hours after Moscow and Kiev signed a deal which they hope will put an end to a long-standing gas conflict.

It is unclear how long it will take Russian gas to reach European countries but Ukraine's Prime Minister Timoshenko promised there would be no delays in transit.

Russia and Ukraine signed a gas deal on Monday which will allow the two sides to resume transit of Russian fuel to European customers.

Gazprom and Naftogaz CEOs, Aleksey Miller and Oleg Dubina, put their signatures on the documents in the presence of Prime Ministers Vladimir Putin of Russia and Yulia Timoshenko of Ukraine.

"We have achieved very important results in the talks with our Ukrainian colleagues. All the problems concerning the transit of Russian gas through Ukraine and supplies of gas to Ukraine have been resolved. Therefore I ask you to work together with Ukraine's Naftogas to synchronise the two gas systems and launch them at 10:00 am Moscow time on January 20," Miller later said.

As Russia's Prime Minister explained after the signing ceremony, there are two contracts: "a contract to supply gas to Ukraine and a contract for transit that runs for ten years". Putin also stressed that the two documents are not connected with each other.

Thus, the gas dispute was resolved on Monday.

"We will restart gas transit immediately after this gas gets into Ukraine's gas pipeline system," Timoshenko said after talks with Russian Prime Minister Vladimir Putin.

"I hope transit supplies in the European direction will be fully resumed in the near future. Gazprom will do all that is needed for this. We now expect our Ukrainian partners to act accordingly. Once again, I want to express regrets to all those who suffered from the gas crisis - which we consider was not started by the Russian side," the Russian premier said.

Meanwhile, Gazprom has been ordered to begin pumping gas in all directions proposed by the Ukrainian partners and will fully meet European consumers' request for the daily amount of gas.

"Gazprom will take all necessary technological measures to ensure that. We expect our Ukrainian partners to speedily restore their gas transportation system," Putin remarked.

According to the agreements Russia and Ukraine have switched to European market formula for calculating gas price from January 1. However, Ukraine will enjoy a 20% discount to the market price in 2009. But by 2010 both countries will switch to full market price.

The two prime ministers have also agreed to get rid of a murky middleman company, RosUkrEnergo - a move that experts described as one of the main successes of the talks.

"Any middleman increases time and cost, and I'm sure direct deals are normally better than doing through intermediaries," says political analyst Vladimir Ismailov.

However, the deal, hailed by Timoshenko as a very advantageous one for Ukraine, has yet to get approval from her political rival, President Viktor Yushchenko.

Previous articles on the topic:

Russia gives a 20% discount to Ukraine

Gas as a political weapon

The pipe is blocked in Kiev

Ukraine refuses to transport Russian gas to Europe?

Dispute gives new hope to Nord Stream

Ukraine signs gas monitoring deal

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