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Last Updated: Thursday, 13 March 2008, 10:14 GMT
Gazprom and Ukraine sign gas deal
Pressure gauge
Russia reduced Ukraine's gas supply for three days last week
Russia's Gazprom has agreed to supply Ukraine with gas for the rest of the year in a deal that will cut out intermediary companies.

It comes after a three day crisis last week when gas supplies to Ukraine were halved by state-owned giant Gazprom.

The clash raised concerns because gas supplies to the rest of Europe also pass through Ukraine's pipelines.

Gazprom has now agreed supply Ukraine's industrial customers directly, a move it hopes will end payment disputes.

Gazprom spokesman Sergei Kupriyanov said there was no need for the intermediaries "after we agreed to supply Ukraine's industrial consumers directly with some volumes, and given the upcoming rise in the Central Asian gas price".

Ukraine will pay $315 (115) per 1,000 cubic metres of gas supplied in January and February this year.

Between March and December it will pay $179.50 per 1,000 cubic metres.

Corruption allegations

The agreement has been signed by the chief executive of Gazprom Alexei Miller and Oleg Dubina, the head of Ukraine's gas company, Naftogaz Ukrainy.

One of the intermediaries that has been removed from the supply chain is RosUkrEnergo, which is half owned by Gazprom and half owned by Ukrainian businessman Dmitry Firtash and his partner Ivan Fursin.

The other is UkrGazEnergo, which is a joint venture between Naftogaz Ukrainy and RosUkrEnergo.

Ukraine's government criticised the intermediaries saying they were unnecessary, not transparent and corrupt.



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