Europe gas deal goes ahead

Jan 18 - Russia and Ukraine reach deal on restoring gas supplies to Europe.

The prime ministers of Ukraine and Russia said they had reached an outline deal to restore gas supplies after marathon talks which dragged on into the small hours of the morning.

Putin's spokesman Dmitry Peskov said the deal envisaged Kiev paying much higher European prices for its own gas, less a 20 percent discount for this year in return for not increasing the transit fees it receives for Russian gas.

Penny Tweedie reports.