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Two new companies for Ukraine gas sales

Russia’s energy giant Gazprom and Ukraine’s national energy company Naftogaz have agreed to create two new companies to facilitate natural gas deliveries to Ukraine, Gazprom’s CEO said on Tuesday.

Alexei Miller said the companies would be created on the basis of parity. He also said the issue of Russian gas supplies to Ukraine would be “straightened out” before March. Moscow and Kiev reached an agreement on gas supplies earlier on Tuesday, Russian President Vladimir Putin announced after talks with his Ukrainian counterpart Viktor Yushchenko in Moscow. Intermediaries will not be used for Russia’s natural gas deliveries to Ukraine, the head of Naftogaz said. “Gas will be supplied [directly] by Gazprom to Natfogaz,” Oleh Dubyna said.

Gazprom said on Monday that it had postponed until Tuesday evening its deadline for Ukraine to pay its $1.5 billion natural gas debt, after which the Russian energy giant had threatened to begin to reduce supplies. “We have worked out a general short-term roadmap. We heard our partners say today that the debt will soon be paid off, and we agreed on the principles for cooperation in 2008 and consecutive years,” Putin told a news conference. Yushchenko said that he expected that 2007 prices would be used to calculate his country’s gas debt, referring to $179 per 1,000 cubic meters. (