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Ukraine gas talks breakthrough?

Thursday, October 30, 2014 - 01:47

The European Commission President says he believes the EU has successfully brokered a deal on gas supplies between Russia and Ukraine. As Sonia Legg reports the Russian rouble has also spiked on rumours of a deal over Crimea.

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Ukraine's attempts to keep warm this winter have hit many obstacles in recent months. And the latest talks to unblock deliveries of Russian gas have again taken longer than hoped. Moscow's been seeking assurances from the EU that it will pick up any unpaid Ukraine bills. The outgoing European Commission President - on his last day at work - said a breakthrough had been made. (SOUNDBITE) (English) EUROPEAN COMMISSION PRESIDENT, JOSE MANUEL BARROSO, SAYING: "Apparently we now have an accord which the Commission has mediated between Russia and Ukraine with regards to the difficult issue of gas and energy between these two countries." A price also seems to have been set for future gas supplies. Ukraine's Prime Minister said the country will pay $378 per 1,000 cubic metres this year and slightly less next year. (SOUNDBITE) (Ukrainian) UKRAINIAN PRIME MINISTER, ARSENY YATSENIUK, SAYING: "$1.45 billion for the first tranche of gas already supplied will be paid as soon as the deal is signed. The remaining $1.65 billion will be paid before the end of the year." Russia's been accused of using gas as a political tool as western sanctions over Ukraine bite. It knows a third of Europe's gas supplies come from Russia, and half of that is pumped through Ukraine. And there was some other good news for Russia too. The rouble - which plunged to another all-time low earlier in the week - rose 3%. Rumours of a Russian deal with Ukraine over Crimea and talk of heavy central bank intervention ahead of a policy meeting caused the spike. Nothing was confirmed. But CMC's Michael Hewson says Russia's increasing isolation has been weighing heavily on markets. (SOUNDBITE) (English) MICHAEL HEWSON, CHIEF MARKET ANALYST, CMC MARKETS, SAYING: "I think the problems are all about politics and less about business. Investors are right to be nervous." A gas deal should also help Russia. A fifth of its national budget comes from the sector.

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Ukraine gas talks breakthrough?

Thursday, October 30, 2014 - 01:47