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Russia, Ukraine & EU agree gas settlement

Phew, thwinter energyat was close.

The long running gas supply dispute between Russia and Ukraine has taken another, more positive twist.

Talks, brokered by the EU, have seen the two parties agree to reopen commercial arrangements with the EU themselves acting as a guarantor for Ukraine’s on-going payment obligations.

European Commission President Jose Manuel Barroso, announced:

“There is now no reason for people in Europe to stay cold this winter.”

Under the terms of the agreement Ukraine will pay $378 per 1,000 cubic metres of gas to the end of 2014 and $365 in the first quarter of 2015.

In addition Ukraine has committed to paying off its energy debts to Russia with $1.45bn due immediately, and a further $1.65bn paid by the end of the year.

The EU became an increasingly interested party as the ‘transit’ reliability to other European markets including Germany began to falter and fears of Ukraine ‘Syphoning’ and Russian ‘sanction retaliation’ grew.

For now though, any immediate fears for security of supply on the continent appears to be averted.