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Russia, Ukraine seal gas deal prior to cold winter

(Xinhua)    16:49, October 31, 2014
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BRUSSELS, Oct. 31-- Trilateral talks have resulted in an agreement between Russia and Ukraine on a gas supply package worth 4.6 billion U.S. dollars for the coming winter, the European Union (EU) announced Thursday.

The package allows the resumption of Russian gas supply to Ukraine till March 2015 on the condition that Ukraine repay in two tranches by the end of the year 3.1 billion dollars of outstanding debt, said a European Commission statement.

The final sum of debt would be determined through arbitration, according to the deal.

"We can claim and pay for amounts that we need. That question has been totally settled," said Ukrainian Minister for Energy Yuriy Prodan following the signing of the pact. "There will be no problems," he stated.

In return, Russia has agreed to deliver gas to Ukraine on the basis of pre-payments.

Ukraine foresees to spend 1.5 billion dollars in purchasing 4 billion cubic meters of gas by the end of this year, said the statement. It is expected to use aid from the EU and the International Monetary Fund (IMF) to make the payments.

European Commission President Jose Manuel Barroso, who witnessed the signing of the deal, said he was delighted to announce a major success at the end of his mandate as head of the executive body of the EU.

"With our strong support, Ukraine and Russia have today found agreement on their outstanding energy debt issues, and on an interim solution that enables supplies to continue this winter," he said.

"There is now no reason for people in Europe to stay cold this winter," he added.

EU energy chief Gunther Oettinger said this breakthrough will not only ensure gas supply for Ukraine during the winter, but also will contribute to de-escalating the tension between Russia and Ukraine over the unrest in eastern Ukraine.

The package can also guarantee a security of supply over the winter for the EU nations closest to the region that stood to suffer should the gas standoff have worsened, he added.

The EU will "fully play its role" to implement the gas deal signed by Ukraine and Russia, French President Francois Hollande and German Chancellor Angela Merkel said in a joint statement.

The two leaders said they had spoken with Russian President Vladimir Putin and his Ukrainian counterpart Petro Poroshenko Thursday evening, and all four "have welcomed the conclusion of negotiations on the delivery of Russian gas to Ukraine, achieved thanks to the mediation of the European Union."

The European Commission said that in the past weeks, it "has been working intensively with the International Financial Institutions (IFI) and Ukraine to help Ukraine prepay for deliveries of gas in the coming winter."

Unprecedented levels of EU aid will be disbursed in a timely manner, and the IMF has reassured Ukraine that it can "use all financial means at its disposal to pay for gas," said the statement, adding further work with the IFI on financial assistance to Ukraine will continue.

However difficulties of the talks will be soon emerge when the Russians and Ukrainians start to discuss terms and prices of gas supply for next summer, as the new deal only stretches through March 2015.

The two sides had been embroiled in a standoff over the gas issue for months. In June, Russia cut off all gas supplies to Ukraine as the two sides failed to reach agreement on payments.

A similar standoff in 2009 had caused serious disruptions in gas supplies from Russia to the EU via Ukraine.

(Editor:Ma Xiaochun、Zhang Qian)
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