Gazprom and Ukraine yesterday reached agreement on natural gas supplies, putting an end to last week's tense standoff in which the Russian energy company halved supplies to Ukraine, a key transit artery to Europe.

The accord removes controversial middleman companies from the multi-billion dollar gas trade between Russia, Ukraine and central Asian gas suppliers - an apparent victory for Yulia Tymoshenko, prime minister of Ukraine, who has been highly critical of intermediaries. It also preserves a purchase price for central Asian gas this year of $179.5 per 1,000 cubic metres.