No penalties for Naftogaz, officials say

KIEV, Ukraine, Nov. 24 (UPI) -- Russian energy giant Gazprom and Ukrainian utility Naftogaz agreed on the terms of a gas agreement that removes fines and penalties for Kiev, officials said.

Russian Prime Minister Vladimir Putin met his Ukrainian counterpart, Yulia Tymoshenko, in the Ukrainian city of Yalta last week to discuss bilateral energy ties.

A tumultuous relationship between Kiev and Moscow was strained further by a January dispute over gas debts and contracts. Gas disruptions in the wake of that row left European customers in the cold as 80 percent of all Russian gas bound for Europe travels through Soviet-era pipelines in Ukraine.

A deal settling the dispute puts stiff requirements on Ukraine in terms of gas purchases and enacts penalties for late payments.

The details of the talks between Putin and Tymoshenko are developing. Oleg Dubina, the chairman of Naftogaz, told lawmakers the deal removed a series of punitive economic measures from the January contract, Russia's ITAR-Tass reports.

"Naftogaz and Gazprom have received instructions to calculate payments for the real amount of gas delivered to Ukraine in 2009, without any fines or penalties," he explained.

Dubina sent a delegation to Moscow on Tuesday to draft formal agreements.