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Russia & Ukraine strike last-minute gas transit deal to avoid stoppage of energy supplies to Europe

The package deal inked between the Russian company and Ukraine has restored the balance of interests between the parties, Gazprom CEO Alexey Miller said, noting that the Russian energy giant “has made everything possible and has proved one more time that it is a responsible supplier and a reliable partner.”

The agreement will ensure the transit of Russian gas through pipelines on Ukrainian territory for the next five years, Ukrainian President Volodymyr Zelensky revealed, adding that Kiev is set to receive over $7 billion from Moscow under the deal.

After the current contract expires, the parties will have an option to extend the deal for another 10 years, Zelensky wrote in a Facebook post late on Monday.

Pursuant to the deal, Ukraine’s Naftogaz will transmit 65 billion cubic meters of Russian gas in 2020 and 40 billion cubic meters annually in the 2021-2024 period, the Ukrainian leader confirmed.

All legal issues that existed between the two companies have been settled, Gazprom confirmed in a statement, noting that the parties also agreed not to initiate any lawsuits with respect to the 2009 transit contract that expires in January.

The two sides signed the documents on Monday following a marathon five days of negotiations in Vienna, with the old agreement due to expire on December 31.

Last week, Russia and Ukraine reached an agreement “in principle” to extend the gas contract, and they have been working on the final documents since then. The delegations had to determine how Russia’s Gazprom will cooperate with the Ukrainian operator of the national gas system, and how the transit of the blue fuel will be organized, as well as finalizing an agreement to drop reciprocal claims.