Ukraine's state gas company announced it has paid Russia's Gazprom in full and on time for gas imported in November this year.

"The company received the necessary confirmations from the banks," the press service said, declining to specify the amount of the payment.

Acting Finance Minister Ihor Umansky said this week that Ukraine's Naftogaz would pay around USD 770 M for Russian gas supplied in November.

In order to pay for gas supplied in October, the Ukrainian government converted around USD 480 M worth of Special Drawing Rights (SDRs) allocated by the International Monetary Fund (IMF), sold the currency to the National Bank of Ukraine (NBU), and then, using the funds raised, bought some of the Naftogaz sovereign bonds that were added to the company's statutory capital early in August this year.

At the end of November Russia 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.

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.

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