Gazprom (Russian gas Company) will receive more than $800 million in additional revenues from the sale of gas from underground storage facilities in Ukraine, a senior Gazprom executive said, The Russian Journal reported.

Commenting on the agreements reached between Gazprom, Naftogas Ukrainy (National oil and gas Company) and RosUkrEnergo on Sunday, Alexander Medvedev, Gazprom's Deputy Chairman of the Management Committee and Gazexport Director General, said the gas would be sold at market prices to RosUkrEnergo, a joint Russian-Ukrainian company.

"The conflict over the 7.8 billion cubic meters of Russian gas stored in
Ukraine is over. The parties have found a mutually acceptable solution," Medvedev said.

"We have credited the Ukrainians with 2.55 billion cubic meters of gas stored in Ukraine as payment for transit. This will cover Gazprom's gas transit requirements for the next two fall-winter periods," he said.

In addition, Medvedev said that Ukraine would increase the transit of gas through its territory by 8 billion cubic meters in 2005 and by 8-11.5 billion in 2006.

"Therefore, thanks to the gas credit and the increased transit volumes, the gas deficit problem can be resolved. Accordingly, it is in Ukraine's interests to observe its commitments to increase transit, and we are confident that we will receive substantial foreign currency revenues," Medvedev said.

The agreements confirmed Naftogas Ukrainy's obligations to RosUkrEnergo on the release of the stored gas and established compensation mechanisms in case the Ukrainian company failed to meet its obligations. "RosUkrEnergo will supply gas from stores in Ukraine to European consumers," Medvedev said.

He added that RosUkrEnergo would export gas through Gazexport, therefore using a single export channel.


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