MOSCOW, October 18 (RIA Novosti) - Russia and Ukraine have reached a preliminary agreement on Ukraine's repayment of debts in order to come to compromise at Russia-Ukraine-EU gas talks scheduled for October 21, Russia's Energy Ministry announced.
"Ukraine takes on an obligation to pay $1.45 billion for the repayment of the existing debt by the end of October, and to pay $1.65 billion more by the end of 2014. Moreover, the parties have agreed on the temporary price of $385 for 1,000 cubic meters, which will be used for the deliveries in winter season on a pre-paid basis. In order to buy gas on a pre-paid basis, Ukraine together with the European Commission should search for the financial resources of $1.6 billion by the end of the year as a bridge loan or as a guarantee of the top rank financial institutions," the ministry stated Friday.
The agreed parameters will be further discussed at the gas talks between Russia, Ukraine and Europe in Brussels on October 21.
The leaders of Russia, Ukraine, Germany and France, as well as Russian Energy Minister Alexander Novak took part in the talks on the sidelines of the Asia-Europe Meeting (ASEM) summit in Milan discussing gas issues. The main topics were the repayment of debts by Ukraine and the security of gas transit through Ukraine's territory.
Ukraine is now facing the approaching winter with low natural gas reserves. In June, Russian energy giant Gazprom switched Ukraine to the prepayment system for gas supplies in light of Ukraine's more than $5 billion gas debt.
In September, during ministerial talks in Berlin, Russia and the European Commission proposed the so-called winter package, envisaging Ukraine paying $3.1 billion of its debt by the end of 2014 in exchange for winter gas deliveries. Russia also insisted that Ukraine pay the first tranche of $2 billion before the start of the deliveries.
On October 13, Russia said it was ready to offer Ukraine a more flexible schedule for the debt repayment, according to which Kiev should pay $1.45 billion in the first installment of $3.1 billion, with the rest of the debt to be paid by the year-end. However, Ukraine refused to make any advanced payment for Russian gas supplies, insisting that payments be made upon delivery.