Moscow and Kyiv have reached a preliminary deal on the transit of Russian gas to Europe via Ukraine but ahead of the looming New Year’s deadline.

The current gas-transit contract between Russia and Ukraine expires at the end of the year and relations between them have been tense since Moscow annexed Crimea in 2014 and supported separatists in eastern Ukraine.

“The Russian and Ukrainian sides have signed a memorandum of understanding,” a spokesman for Russian gas giant Gazprom was quoted as saying by Russian news agencies on December 20, while giving no details of the deal.

Russian Deputy Prime Minister Dmitry Kozak and Energy Minister Aleksandr Novak were quoted by the RIA Novosti news agency as saying it was a five-year deal, which would be signed before the end of the month.

The current deal expires after December 31.

The Ukrainian presidency confirmed the deal on Facebook, adding that details would be made public on December 21.

Russia has offered to pay Ukraine about $3 billion, while Kyiv has signaled it may drop a $12 billion legal case in response, sources said ahead of the talks.

Gazprom supplies more than 36 percent of the European Union’s gas market. The EU has been mediating the talks to secure a new agreement.

Based on reporting by AFP, Reuters, TASS, Interfax, and RIA Novosti



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