Presidents Putin and Yushchenko reached a preliminary deal on gas issues early this evening, averting a threatened gas shutoff. The deal comes amidst a broader agreement on the future of Russian-Ukrainian relations through 2009, which likely enabled Yushchenko and Putin to employ long-term promises for the gas sphere and take into account corresponding repercussions.
Putin accepted Yushchenko’s promises to repay debts–starting this Thursday (happy Valentine’s Day…)–accrued during the final two months of 2007 totaling just over $1 billion. The fate of the alleged $500 million debt that accumulated since then wasn’t as clearly enumerated. Also key, Gazprom and Naftogaz agreed in principal to the shift towards direct sales, rather than through the intermediaries RosUkrEnergo and Ukrgazenergo. In their place will be two new Gazprom / Naftogaz joint ventures.
Russia and Ukraine today agreed to establish two new companies to handle the gas trade, replacing RosUkrEnergo AG, the only company currently allowed to import gas into Ukraine.
“We want our cooperation to be as transparent as possible,” Putin said.
The two new companies will handle exports to Ukraine and distribution in the country, Miller told reporters in Moscow today.
Gazprom will own 50 percent stakes in both companies. NAK Naftogaz Ukrainy, Ukraine’s state-owned natural gas company, will hold equivalent stakes.
The current price — $179.50 — will also apparently be secured for 2008. However, Putin emphasized that any gas Gazprom provided to compensate for shortages from Central Asian supplies needs to be paid for at European levels, which could lead to a potential sticking point in the deal. (See my post from Saturday about issues surrounding the supposed debt accumulated since Jan. 1st due to such shortages.)