Gazprom to advance Ukraine $2 billion for gas transit

Ukraine - the main route for Russian gas to Europe - is struggling with monthly payments for purchases of Russian gas and has asked Moscow to lower its prices.

Previous disputes over gas prices between Kiev and Moscow have led to Russian gas supply stoppages to Europe, which is seeking ways to cut its dependence on Russian fuel.

"Without a doubt, this agreement is very important to secure the pumping of gas into underground storages in Ukraine in necessary volumes in order to meet peak demand in 2012/2013," Gazprom's Chief Executive Alexei Miller said.

"This is very good news for our European partners, for our consumers, as full Ukrainian storages are a firm guarantee of Russian gas transit next winter," he added.

Russian gas transit through Ukraine to Europe rose to 104 billion cubic meters in 2011 from 95.4 bcm in 2010, but it has been falling this year due to lower demand and as Russia redirects some flows via the 27.5-bcm-a-year Nord Stream pipeline on the bed of the Baltic Sea.

At the height of last winter's cold snap Russia was unable to meet rising gas demand from the European Union. Gazprom plans to double storage capacity in Europe to around 5 bcm by 2015 to ensure security of fuel exports.

Russia's total exports to Europe are expected to be flat this year at 150 bcm against a backdrop of flagging demand hit by the financial crisis.

(Reporting by Vladimir Soldatkin; Editing by John Bowker and Helen Massy-Beresford)

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