"As a result of a substantive discussion, we managed to reach an agreement on an intergovernmental memorandum on gas deals which may form the basis of an agreement between Gazprom and Naftogaz," Vladimir Putin said after talks with his Ukrainian counterpart, Yulia Tymoshenko, at his residence outside Moscow.
Under the agreement, the parties will drop any gas intermediaries and switch to direct relations involving Russia's state-run Gazprom and Ukraine's national oil and gas company Naftogaz. Furthermore, Naftogaz will receive the right to re-export gas to the European Union jointly with Gazprom.
Ukraine currently pays $179.5 per 1,000 cubic meters for gas imported from Russia or via Russian territory. Until recently, the supply scheme involved the Swiss trader RosUkrEnergo, in which Gazprom holds 50%.
In mid-February, Russia and Ukraine agreed to remove intermediaries, which Kiev earlier blamed for accumulating its gas debt, and set up two joint ventures between Gazprom and Ukraine's national energy company Naftogaz.
Speaking on the outcome of the talks, Tymoshenko said: "Very important agreements have been reached," adding that the European consumers would have uninterrupted gas supplies.
The latest spat between Moscow and Kiev raised fears in Europe that Ukraine could tap gas destined for European consumers to make up for a shortfall in domestic supplies.
