Speaking to journalists during a conference call today Gazprom's Deputy CEO Alexander Medvedev confirmed that contracts had been signed with Ukraine for both the supply of gas to the Ukraine and transit of Russian gas to Europe: 

—The signing of the contracts, both of which cover 10-year terms, is a major achievement.

—2009 is the last year of discounted prices for natural gas as well as special transit rate for transit via Ukraine. In 2010, Ukraine will pay European prices for supply and Gazprom will pay European prices for transit.

—Assuming Ukraine's future compliance with the contracts, there should never be a repeat of this winter's situation (interruption of transit supplies to Europe). Both contracts contain internal mechanisms to prevent non-compliance, including a clause covering advance payment in the event of lack of payment by Ukraine for the gas it receives.

—Today, in accordance with the agreements, the flow of natural gas from Russia to Europe started at 10am. Today, the volume should reach 423.8 million cubic metres of gas.

—Gazprom reserves the right to claim for any damages suffered over the last month, but in respect of the supply and transit contracts and outstanding debts, Gazprom and Ukraine have found a solution to settle the dispute.

—Following the agreement of new contracts, there is no need for the monitoring system to continue. Unfortunately the function of the international monitoring system was not performed in full, with monitors unable to enter Ukraine's underground storage facilities to assess the situation.

—In 2009 the average price paid by Ukraine will be below $250/1000cm , given the falling price of crude oil and oil products. European customers are likely to pay around $280/1000cm. In 2010, the transit rate will increase to a level of around $2.50 per 1000cm per 100km, so Ukraine's transit revenues of Ukraine will increase by about 50%, given the current forecast of natural gas prices. 

—Over the period of the dispute Gazprom lost approximately $100m per day as a result of not being able to supply its European customers, but the company believes that a substantial part of these losses will be covered over the coming days and months due the need to refill underground storage facilities and the high level of demand from customers. Gazprom's investment programme has not been affected and projects such as Nord Stream, Shtokman and Yamal will continue as planned.

—The dispute has emphasised the need for South Stream - it is clear that the sooner this diversification of transit routes takes place, the better for Europe. This is not only in respect of political risk, but also technical risk.