Ukraine, Russia Formalise Cheaper Gas Deal

KIEV, Ukraine -- Ukraine's state energy firm Naftogas and Russia's Gazprom have signed a formal amendment to a gas contract cutting the price of Russian gas by a third for the first quarter of 2014, Interfax news agency said on Thursday.

In December, Russia agreed to slash the price of gas for Ukraine to $268.50 per 1,000 cubic metres after Kiev walked away from a free trade pact with the European Union.

According to the agreement, the new price level must be confirmed every quarter, an arrangement that creates financial leverage for Moscow to prevent Kiev from seeking to revive ties with the EU.

Ukraine had been paying around $400 per tcm to import an estimated 26-27 billion cubic metres from Russia, its main supplier, in 2013.

In 2014, Ukraine plans to import 30 to 33 bcm of gas mostly from Russia.

The former Soviet republic had also imported gas from EU members Hungary and Poland - most of which was supplied to them by Russia - but Ukraine suspended imports in January due to its high price.

Source: Yahoo News