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News / 21 April 2010 | 17:57
Ukraine got cheap gas in exchange for prolongation of Russian fleet stay

Ukraine got cheap gas in exchange for prolongation of Russian fleet stay

President of Ukraine Viktor Yanukovych and Russian President Dmitry Medvedev signed the Agreement between Ukraine and the Russian Federation on deployment of Russian Black Sea Fleet in Ukraine.

Also in the presence of the two Presidents Russia’s Gazprom Board Chairman Alexey Miller and Chairman of Naftogaz of Ukraine Yevhen Bakulin have signed amendments to the contract between Gazprom and Naftogaz of Ukraine on gas trade for 2009-2019 and amendments to the contract between Naftogaz Ukraine and Gazprom on the volumes and conditions of gas transit through Ukraine for 2009-2019.

Ukraine will receive a discount of $100 per 1,000 cu m at the natural gas price of $330 and a 30% discount on other prices, Russian President Dmitry Medvedev said on Wednesday.

Medvedev's announcement came after a meeting with his Ukrainian counterpart Viktor Yanukovych in Kharkov in eastern Ukraine.

"Discounts for Ukraine will come into effect from April this year," Yanukovych said.

The discount will apply to 30 billion cubic meters of Russian natural gas to be supplied to Ukraine in 2010 and 40 billion cubic meters in subsequent years.

The amendments to the gas deal between Russia and Ukraine also cancel provisions on penalties, which had never been applied.

Ukraine currently purchases Russian natural gas at the average annual price of $337 per 1,000 cu m.

The gas price equaled $305 per 1,000 cu m in the first quarter, and increased to $330 per 1,000 cu m in the second quarter of this year.

The deal seems to be advantageous for both parties as Ukraine has agreed in exchange to extend the term of the Russian Black Sea Fleet presence in the country's Crimea for 25 more years.

The new agreement on the Russian Black Sea Fleet signed after talks between Medvedev and Yanukovych also stipulates the extension for an additional five years after the term expires.

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