Russia has spared Ukraine from a steep price rise in gas for the time being despite a row over arms sales to Georgia.
Russian prime minister Vladimir Putin and his Ukrainian counterpart Yulia Tymoshenko met outside Moscow to hammer out a new deal.
During the talks, Putin criticised Ukraine over its alleged sale of arms to Georgia.
Despite the comments, Tymoshenko remained focused on the energy deal.
â€˜â€˜We have the opportunities and basis to come to a strategic agreement, we are ready for that and to agree on the gradual transition to market prices,â€™â€˜ said Tymoshenko. â€˜â€˜I think this will create a solid foundation to our relations, which will not cast any doubts or cause any stress. I am sure Europe, Russia and Ukraine need it,â€™â€˜ she added.
While no costs were mentioned, itâ€™s reported the two premiers agreed to set prices at market rates.
However, Russian gas giant Gazprom says Tymoshenko will not get an easy ride in her bid to shield Ukraine from a sharp price rise.