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On Monday the Ukrainian prime minister arrived in Moscow as Russia and Ukraine prepared to sign a deal ending a contentious dispute that cut off Russian natural gas shipments to Europe for nearly two weeks.
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Over the weekend, Yulia Tymoshenko and her Russian counterpart, Vladimir Putin, reached a preliminary agreement to restore gas supplies to Europe and Ukraine.
Tymoshenko's office said a formal deal would be signed Monday by Russia's gas monopoly Gazprom and Ukraine's Naftogaz.
According to Naftogaz it will take up to one and a half days to pump gas to its western border once Russia restarts deliveries.
On January 1, Russia stopped shipping gas to Ukraine for domestic use on Jan. 1 in a dispute over prices. It then halted all gas shipments to Europe via Ukraine on January 7, alleging that Ukraine was siphoning off Europe-bound gas.
This was strongly disputed by Ukraine, claiming that Russia was not sending enough "technical gas" to push the rest further west.
This confrontation left more than 15 nations without gas causing them to seek alternative resources.
In a preliminary agreed upon deal, Ukraine will get gas at 20 percent discount of the current average European price. This is more than double the price of what Ukraine was paying in 2008. The current European price stands at $450 per 1,000 cubic meters.
Natural gas prices are however expected to fall sharply later this year as a result in a slump in oil prices.
Russia seems to be the winner in this deal by getting a higher price from Ukraine and also at the same time continuing to pay the same transit fees to Ukraine.
However in 2010, Ukraine will pay full European market prices for gas to Russia and Russia will pay European standard prices to Ukraine to transiting the gas.
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