Brussels, 13/02/2008 (Agence Europe) - Following a meeting in Moscow on Tuesday 12 February, the Presidents of Russia, Vladimir Putin, and Ukraine, Victor Yushchenko, announced that the Russian state energy company Gazprom and Ukrainian authorities had reached a compromise ending their latest gas dispute. Because of arrears of $1.5 billion run up by Ukraine, Gazprom, on Thursday 7 February, threatened to reduce gas supplies with effect from 12 February unless Kiev settled its debt (see EUROPE 9597). “Gazprom is satisfied with the offer made by the Ukrainian side. We have agreed on the principles of cooperation,” said President Putin, after a meeting largely devoted to Russian-Ukrainian cooperation. “We have agreed that Ukraine will pay back the debt” accumulated in 2007, said President Yushchenko. Under the terms of the agreement, Kiev will begin to repay the debt from 14 February and two intermediary companies will be replaced, says Gazprom in a press release, giving assurances that there would be full supplies to Ukraine. The change in the opaque system of intermediaries, through which Ukraine pays for gas imported from Central Asia via Russia, was one of the main demands of Ukrainian Prime Minister Yulia Timoshenko when she recently took office. RosUkrEnergo and UkrGazEnergo, which have repeatedly been at the centre of corruption allegations in the Russian press, will be replaced by two companies jointly held by Gazprom and the Ukrainian Naftogaz. Responding on Tuesday, the European Commission welcomed the agreement, expressing hope that it would avoid further problems between Kiev and Moscow. “The Commission expects that this solution will establish the basis for a stable and solid bilateral energy relationship,” said Energy Commissioner Andris Piebalgs. (E.H.)