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Ukraine, Russia agree on winter natural gas supply

KIEV, Ukraine - The Ukrainian president has said his country has reached an agreement with Russia on supplies of natural gas for the winter.

When Russia cut off gas supplies to Ukraine in June over unpaid bills, it raised the risk that Ukraine would be left without heating during the coldest months of the year. It also raised fears that Russia could cut off flows to Europe if Ukraine began siphoning off gas from the pipelines crossing its territory, as has happened during past gas disputes.

President Petro Poroshenko said in a television interview late Saturday that Russia has agreed to supply Ukraine with gas through March 31 at a price of $385 per 1,000 cubic meters.

"I can say that Ukraine will have gas, Ukraine will have heating," he said.

Poroshenko said he expected the deal to be signed during the next round of European Union-mediated gas talks, to be held Tuesday in Brussels.

Following Europe-brokered talks in Italy on Friday, Poroshenko and Russian President Vladimir Putin reported progress on both a definitive peace settlement in eastern Ukraine and on settling the gas dispute.

Alexei Miller, the CEO of the Russian state gas company Gazprom, said the leaders agreed that Ukraine would pay back $3.1 billion by the end of the year. It was not clear, however, where Ukraine would get the money.

Poroshenko said in the interview that his government was still figuring out how to cover the debts of Ukrainian state gas company Naftogaz, but that it has several possible options, including financing from the International Monetary Fund.

The deal Poroshenko described appears to be only a short-term solution, however. He said Ukraine still insists that the gas price should be only $325 in the summer, while Russia wants a fixed price.

There was no immediate comment from the Russian government or Gazprom to Poroshenko's announcement.

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