Russian Prime Minister Vladimir Putin and his Ukrainian counterpart Yulia Tymoshenko Sunday reached a new deal to resume gas supply to Europe soon.
"We have reached an agreement," Putin said after negotiations with Tymoshenko over the current gas row that has left millions of Europeans without heating in the depths of winter for more than a week.
"As our Ukrainian partner assured us, the transit will be resumed shortly," Putin said in a joint televised statement with Tymoshenko.
Leaders of Russia and Ukraine have tasked their respective national gas companies, Russia's Gazprom and Ukraine's Naftogaz, with drawing up agreements no later than Monday, Tymoshenko said.
"All natural gas supplies will resume as soon as these documents are signed," she said.
Tymoshenko described the all-night talks as "not easy" but "fruitful," saying the two sides had finally achieved a mutual understanding that allowed them to sign agreements.
The breakthrough came after the European Union (EU) mounted pressure for an immediate resumption of gas supplies, and warned that it would review its relations with both Russia and Ukraine if the two failed to resolve their dispute this weekend.
Under the new gas transit deal, Moscow and Kiev agreed that Russia would sell Ukraine gas "based on the European price formula" but would offer a 20-percent discount for 2009.
"Starting from Jan. 1, 2010, we will completely switch to European price standard both on gas and gas transit," Putin said.
In return for the discount, Ukraine agreed to keep its transit fee for Russian gas at a preferential level.
However, it is still unclear whether Tymoshenko has the backing of her domestic political rival Ukrainian President Viktor Yushchenko to stick to the terms she negotiated in Moscow.
Last year, Tymoshenko flew to Moscow and managed to negotiate a gas deal with Putin, which, however, was vetoed by Yushchenko right after she returned to Kiev.
Moscow and Kiev started negotiation on Saturday. It was their first face-to-face talk between governments since early January when their gas dispute started.
The talks followed a summit in Moscow of gas-consuming nations at the Kremlin on Saturday afternoon which failed to resolve the dispute.
Russian President Dmitry Medvedev told a press conference following the summit that he expected to resume gas supply to Europe within the next few days.
The Russian leader said he hoped Tymoshenko was authorized to represent Ukraine during the negotiation on the gas crisis.
While stressing the need to diversify the routes of Russian gas exports, Medvedev also insisted that Ukraine pay market prices for Russian gas.