Gazprom to continue transit through Ukraine until legal issues resolved
Gazprom to continue transit through Ukraine until legal issues resolved
Russian Gas Giant Ordered to Pay Ukraine $2.56 Bln Over Price Hikes
03 March, 2018, 00:32
Gazprom's move follows a decision on February 28 by the Stockholm arbitration court stating that Gazprom had to pay $2.56 billion to the Ukrainian energy company Naftogaz after weighing mutual claims and counterclaims related to gas supplies and transit after several years of commercial disputes.
The head of Naftogaz, Andrei Kobolev, said on Twitter that the decision marked "an important day for the Ukrainian people and the future of European gas markets", while Ukrainian President Petro Poroshenko congratulated Ukrainians and called the ruling "a convincing and historic victory!" It did not give further details. Gazprom also demanded payment of the debt for gas delivered to Ukraine between May and June 2014, plus fines.
Gazprom will have to make a net payment of Dollars 2.56 to Naftogaz following the Awards in two gas Arbitrations.
On Thursday, Gazprom's deputy chairman Alexander Medvedev told journalists the company won't send shipments of natural gas to Ukraine's Naftogaz as of March 1 after the sides failed to reach an agreement.
It was reported that it could resume buying gas from the Russian transnational corporation Gazprom in the first quarter of 2018, but this has not yet happened. "We get more [revenues for] gas from transit than [we] pay for imported gas", he added.
Gazprom was claiming $37bn under the take-or-pay clause but the court ruled only the price of gas received by the Ukrainian company in the second quarter of 2014 was to be lowered from $485 to $352 per 1,000 cubic meters, whereas Naftogaz wanted a retroactive price change starting from May 2011.
"Gazprom will defend its rights by all available means in accordance with the applicable law", Gazprom said in a statement.
Disagreements between Gazprom and Naftogaz predate the collapse in relations between Ukraine and Russian Federation in 2014 following the pro-European uprising in Kiev that ousted a Moscow-backed president.
The contract in question was signed by then prime minister Yulia Tymoshenko and was widely derided as Ukraine ended up paying some of the highest prices in Europe for Russian gas. Since then Russian Federation has been pushing for new pipeline projects via the Baltic and Black seas to bypass Ukraine.
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