Russia and Ukraine reach winter gas deal

Russia, Ukraine and the European Commission have signed an agreement that will see Moscow resume vital supplies to Ukraine this winter. The $4.6 billion (£2.9bn) “winter package”, which covers the […]

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By Priyanka Shrestha

Russia, Ukraine and the European Commission have signed an agreement that will see Moscow resume vital supplies to Ukraine this winter.

The $4.6 billion (£2.9bn) “winter package”, which covers the period from now until the end of March 2015, will also ensure gas supplies to EU nations via Ukraine are secure.

José Manuel Barroso, President of the European Commission said: “This is an important step for our shared energy security on the European continent. There is now no reason for people in Europe to stay cold this winter.”

Under the deal, Russia will deliver gas following advanced, monthly payments by Ukraine, which is free to order as much gas as it needs and not subject to “take-or-pay obligations”.

The nation is expected to buy four billion cubic meters of gas until the end of this year, costing $1.5 billion (£0.94bn).

Ukraine will also settle its debts by making payments in two tranches – $1.45 billion (£0.9bn) “without delay” and $1.65 billion (£1bn) by the end of the year, with money coming from the International Monetary Fund as well as the EU, which will act as the guarantor.

“Unprecedented levels of EU aid will be disbursed in a timely manner and the International Monetary Fund has reassured Ukraine that it can use all financial means at its disposal to pay for gas,” the Commission said.

The agreement follows months of talks between EU officials and the Russian and Ukrainian energy ministers.