Russia, Ukraine Agree on Gas Supplies Compromise

Russia has agreed to ease the terms under which it supplies gas to Ukraine, in a deal which Moscow says should prevent disruption in coming months.

The deal was announced after talks between Russian Prime Minister Vladimir Putin and Ukraine's Yulia Tymoshenko.

It means Ukraine will not be fined if, for using less gas than in its current contract because of the downturn.

Putin said Gazprom and Naftogaz, the two countries' energy firms, would agree on new volumes.

"We deemed it possible to meet Ukraine halfway and tweak several of our earlier agreements," Putin said, as cited by BBC.

Tymoshenko played down the prospect of further disruptions to Europe's gas supply, pledging that Ukraine would meet its obligations to Russia.

"Ukraine has been paying and will continue to pay on time," she said.

In January, many countries in Europe were left short of gas due to a payment dispute between Moscow and Kiev.

Bulgaria was the hardest hit by the gas supply row as it receives all of its gas from Russia via Ukraine and has no access to any alternative gas routes or suppliers.

Russia provides about a quarter of the gas consumed in the EU and 80% of that is piped through Ukraine.