FINAL UPDATE: Russia and Ukraine Sign Off on Gas Deal, Supplies to Europe to Resume

Rusian Prime Minister Putin (right) greets Ukrainian Prime Minister Tymoshenko (left) in Moscow on Saturday. (Image: AP via NPR.org)

The nearly two week-old standoff between Russia and Ukraine that caused the cutoff of Russian gas to several areas of Europe was ended with an agreement on Sunday following intense late nigh negotiations over the weekend, the International Herald-Tribune reports.  The Russian national energy company, Gazprom, and its Ukrainian counterpart, Naftogaz, signed a 10-year deal under which Ukraine will pay 20% less for Russian gas than European customers.  Russia also won a key concession–Gazprom will no longer pay transit fees to use Ukrainian pipes to send gas to Europe .

With the underlying issue resolved, the stage is set for full gas supplies to resume flowing through Ukraine to Europe.  Although the agreement called for immediate restoration of gas supplies, the gas will take 36 hours to cross Ukraine and reach Europe.

Ukrainian Prime Minister Yulia Tymoshenko and Russian Prime Minister negotiated the deal in Moscow beginning on Friday and reached an agreement in the early morning hours on Sunday.