After the absolute shutdown of natural gas flowing from Russia to Ukraine earlier this month - resulting in an international public relations war between the countries - today, an agreement was signed between the two countries to ensure that gas flows again.

As Eastern Europe sports temperatures of -5ºC or colder for the last number of weeks, customers in Ukraine have been left in the cold after the January 7th cut off by Russian gas giant Gazprom, to the Ukrainian state-run gas company, Naftogaz Ukrainy. The Russian company said that they did not cut off the gas, rather the Ukrainian’s shut down all export pipelines therefore the company has “lost physical possibility to deliver gas to Europe,” said a chief executive at Gazprom earlier this month.

A number of other countries were effected by the reduction in gas delivery through the Ukraine; Lithuania, Slovakia and Bulgaria being the most effected other than the Ukraine.

Russia demanded, as a result of the changes, that the state-run gas company pay $450 per million cubic meters of gas; the agreement reached today - a paltry $250 per million, still an increase from 2008’s $179.50. The company will pay a 20 per cent reduction this year, but 2010 will see the full price - an adjustment Gazprom says is necessary.

The Gazprom press release also suggested that the former “meddling middle-man,” RosUkrEnergo, a Switzerland-based firm, would no longer be the source of negotiations - rather, Gazprom and Naftogaz would deal with each other directly.

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