wnol.info March 22 2018

Gazprom already applied to arbitration to terminate contracts with Naftogaz

March 22 2018, 05:37 | Irvin Gilbert

Gazprom ordered to pay $2.56bn in damages to Naftogaz in gas transit arbitration

Gazprom must pay Ukraine's Naftogaz $2.5bn after arbitration decisions

The head of Gazprom, Aleksei Miller, stated that the company was terminating all contracts with Ukraine immediately.

Naftogaz was awarded damages of Dollars 4.63 billion for Gazprom's failure to deliver the agreed transit gas volumes.

"The arbitrators justified their decision by the sharp deterioration in the Ukrainian economy". We are strongly opposed to Ukraine's economic problems being solved at our expense.

Almost four years after failing to agree on a price for Russian gas shipments, Ukraine's state-owned energy company has declared victory in global arbitration that orders Russia's Gazprom to pay $2.56 billion for failing to fulfil export volume obligations.

It should be reminded that Naftogaz of Ukraine filed a lawsuit at the Stockholm Arbitration court under the gas transit contract, stating that Gazprom violated the contract on transportation volumes and demanded the Russian company to pay at new tariffs double the contract rates.

"The Commission stands ready to steer a trilateral process which in the past has already proven to be effective in situations of disagreement", Sefcovic said in a statement.

Earlier, Medvedev said that Gazprom had returned the money Naftogaz paid for gas supplies in March and would not start them due to the lack of the approved supplement to the current contract.

These issues followed the Stockholm arbitration court ruling Wednesday which found mainly in favor of Naftogaz in the case of a disputed transit contract with Gazprom.

The decision was welcomed in Ukraine as a major win for Naftogaz.

"At the same time, Gazprom did not supply Naftogaz with 18 million cubic meters of gas, for which the company made a prepayment".

Ukraine is the main route for the Russian gas to Europe where Gazprom accounts for around 35 percent of the market share.

Gazprom's Miller is reportedly very unhappy with the terms of the deal that dictate both volumes and prices to the Russian gas company.

Ukraine's state-owned gas pipeline operator Ukrtransgaz, however, said it had to take extra measures to ensure gas transit to its European customers.

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