Russia and Ukraine announced terms of a new gas transit deal on Saturday, under which Moscow will supply Europe for at least another five years via its former Soviet neighbour and pay a $2.9 billion settlement to Kiev to end a legal dispute.
The deal is a major breakthrough for both countries, which have been seeking to resolve disputes over Ukraine’s eastern Donbass region and the Crimea peninsula, which Russia annexed in 2014.
Under the new agreement, Russia’s Gazprom, which supplies over a third of Europe’s gas needs, would use an agent to book the transit of 225 billion cubic metres (bcm) of the fuel via Ukraine over five years.
Of the total, 65 bcm would be shipped in 2020, falling to 40 bcm in 2021 and in each of the subsequent years, Gazprom said.
The Russian gas company would also pay Ukraine the $2.9 billion before Dec. 29, in line with the amount proposed in arbitration rulings between Gazprom and Ukrainian energy firm Naftogaz in 2018.