Yuriy Boiko, Ukraine's energy minister, went to Moscow to resolve the issues with Gazprom. "The issue is very complicated," said Ukraine's Prime Minister Viktor Yanukovych. Yuriy Boiko held negotiations in Moscow with Russia's OAO Gazprom on gas supplies and the alleged debt towards the Russian company. Shortly, Gazprom's CEO and Ukraine's fuel and energy minister announced the two sides reached an agreement. It appears that the $1.3 billion debt was not created by Ukraine as a state but by Gazprom's Ukrainian customers.

"An agreement was reached that Ukraine's current government will take the problem under its control and ensure payment of the debt before November 1," Gazprom said. Apart from Yuriy Boiko and Alexei Miller, the meeting was attended by Russian First Deputy Prime Minister Dmitry Medvedev, who is also chairman of Gazprom's board of directors. They have agreed to solutions which will avoid similar standoffs in the future.

Meanwhile, the European Commission said on Wednesday it sees Gazprom a reliable supplier, appreciating "they have informed the Commission before taking any decision" on the debate with Ukraine.

Russian gas giant OAO Gazprom has again threatened to cut exports to Ukraine over a $1.3 billion debt. Gazprom shut off supplies to Ukraine in January 2006 and then suspected it of siphoning off fuel meant for Europe from the pipeline which transits its territory.

"If the debt is not settled in October, Gazprom will be forced to begin to cut natural gas supplies to Ukrainian consumers," the state-run gas company said in a statement. It appears that this debt stems from the siphoned gas, as Ukrainian energy company Naftogaz doesn't appear to know of any debt:

"We don't understand what Gazprom means. We don't understand where (the sum) came from," Naftogaz spokesman Oleksy Fyodorov told AFP. "We hope that by tomorrow, at least, we'll understand what they're talking about and define our position," he said.

Meanwhile, the European Commission called on Russian gas monopoly Gazprom to resolve speedily differences over payment for gas delivered to the former Soviet republic, also noting Gazprom had promised to honor all existing gas supply commitments to European companies. In January 2006, Russia "stopped" gas to Ukraine, meaning it reduced its output with the amount which Ukraine was supposed to get. However, apparently Ukraine continued to siphon gas as the supply for European partners was also affected.

Gazprom also threatened neighboring Belarus with similar cuts in August, before the country paid $460 million of debt. Gazprom's pipelines to Europe cross Ukraine and Belarus, but most of the gas passes through the Ukrainian pipeline.

Gazprom, founded in 1989, is the largest Russian company and the biggest extractor of natural gas in the world and the world's third largest corporation with over $ 300 billion of market capitalization.