The Russian-Ukrainian gas agreement signed in early January marked a final and complete legal resolution to the long-standing gas dispute between the two countries, a Russian government statement said Thursday, RIA Novosty informed.

"The Russian government considers the documents signed on January 4, 2006 to be the final legal solution to the dispute," said a statement from the government, which convened for its first session this year.

The dispute started when Russian energy giant Gazprom said it wanted Ukraine to pay market prices for natural gas, whereas Ukraine said it wanted to continue operating under a barter agreement setting the price at about $50 per 1,000 cu m. A deal was finally hammered out after Gazprom cut off supplies to its neighbor. Gazprom will now sell gas to a Swiss-based trader RosUkEnergo for $230 per 1,000 cu m, which national gas company Naftogaz Ukrainy will then buy for $95.

The government also said in the statement that it was satisfied with how Russian-Ukrainian relations in the gas sector had been settled through a transition to internationally applied market principles of cooperation. The government also welcomed the readiness of the Ukrainian national gas company, Naftogaz, to honor its commitments.

According to the document, the transition to market principles will make bilateral relations transparent and based on partnership. "It will enable us to work together on the Ukrainian market and the markets of third countries," the statement said.

The government said the gas agreements would cover Ukraine's natural gas needs and guaranteed the transit of Russian gas to consumers in Europe via Ukrainian territory.

"The Russian government is prepared to assist Gazprom in fulfilling its gas obligations to partners," the document said.


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