Russia's Gazprom says has started ending gas contracts with Ukraine

Michele Moreno
March 4, 2018

February 28 the decision of the Stockholm arbitration, Naftogaz has made payment in the amount of 4.63 billion USA dollars for failure to supply Gazprom agreed amounts of gas for transit.

"Gas supply and transit should never be a political weapon".

Gazprom said Thursday it disagrees with the arbitration final ruling on the contract for gas transit via Ukraine and "will defend its rights through all means available under applicable legislation".

In this regard, Ukrainian President Petro Poroshenko has indicated that Kiev will want to seize Gazprom's assets if the Russian side fails to comply with Stockholm arbitration.

Russian gas giant Gazprom said on Thursday it would defend its rights after an global arbitration court found in favour of Ukrainian energy firm Naftogaz in the final stage of a long-running legal battle.

Kyiv and Moscow were drawn into a new gas dispute on March 1, after Russia's state-owned Gazprom unexpectedly decided not to restart supplies to Ukraine, forcing Kyiv to reduce supplies despite freezing temperatures. "This will improve security of supply and give Ukrainians affordable energy", Kobolyev added. Taking into account the amount of money previously given to Gazprom in relation with supply contract, the arbitrators offset counter claims, which resulted in Gazprom's being obliged to pay $2.56bn to Naftogaz.

"Earlier, the same tribunal agreed with Naftogaz's reasoning that the fall in gas demand and Naftogaz's failure to fulfil its gas offtake commitments had been caused by a sharp decline in the Ukrainian economy". Since November 2015, Kiev has not bought Russian gas, replacing it with reverse gas from Europe. He also said due to lack of gas supplies from Russia Ukraine faced a gas deficit and had to limit fuel consumption in the country since March 6. At the same time, the "take or pay" condition was preserved for 80% of this volume. Naftogaz wanted a retroactive price change starting from May 2011. The Stockholm court ruled that Gazprom should pay only $4.7bn to Naftogas.

Naftogaz also said on Saturday that gas transit to Europe "remains intact". Summing the two awards, Gazprom has been left with a bill of $2.56bn.

Other reports by Insurance News

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