November 29, 2010 / 5:49 PM / 8 years ago

Gazprom settles gas dispute with Ukraine

* Reduces threat to Russian gas supplies to European Union

* RosUkrEnergo to pay off debts to Gazprom and Naftogaz

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MOSCOW, Nov 29 (Reuters) - Russian energy giant Gazprom (GAZP.MM) and Ukraine’s Naftogaz have agreed to settle a gas dispute dating back to 2008-09, reducing the potential threat to Russian gas supplies to Europe, Gazprom said on Monday.

Naftogaz will return 12.1 billion cubic metres of gas to RosUkrEnergo (RUE), a company jointly owned by Gazprom and Ukrainian tycoon Dmytro Firtash, while RUE will redeem $1.7 billion of debt to Naftogaz and $810 million to Gazprom.

Under the deal, Naftogaz bought $1.7 billion in debt owed to Gazprom by intermediary company RUE and then took 11 billion cubic metres of gas from the intermediary, saying it was collecting the debt.

However, RUE has since challenged the move in a Swedish arbitration court which ruled in June that Naftogaz was a breach of contract by taking the gas. [ID:nLDE657219]

Naftogaz is now due to return the gas, worth about $2.8 billion according to the price Ukraine currently pays for Russian gas.

Last week, Ukraine’s Supreme Court upheld a ruling obliging Naftogaz to return gas to RUE. [ID:nLDE6AN19M] (Reporting by Vladimir Soldatkin; Editing by Thomas Grove and Dan Lalor)

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