nsucurrent.com March 17, 2018

Gazprom already applied to arbitration to terminate contracts with Naftogaz

04 March 2018, 03:56 | Colleen Roy

Vincent Mundy Bloomberg

Vincent Mundy  Bloomberg

Taken into account Ukraine's over-2-billion-dollar arrears to Russian Federation for gas deliveries, Naftogaz is counting on receiving about 2.56 billion dollars from Gazprom, he said.

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

Gazprom confirmed the ruling and registered its disagreement with the Arbitration Institute of the Stockholm Chamber of Commerce, the state-run RIA Novosti news agency reported. The Ukrainian side has no funds for repayment of the $2-billion debt to Gazprom under the court decision on the first suit.

According to the court ruling, Naftogaz was granted compensation of 4.63 billion US dollars for the failure of Russia's gas giant Gazprom to supply the contracted volume of gas for transit via Ukraine, said Kobolev.

The Chief Executive Officer of Naftogaz said that according to meteorological forecasts the low temperatures in the country will continue for a few more days, by March 4, after which the daily gas consumption will return to 160 million cubic meters from the current 200 million cubic meters.

According to the Ukrainian contract Gazprom is supposed to supply 40bcm of gas in 2009, and starting from 2010, 52bcm annually, not the 5bcm figure decided by the arbitration tribunal. However, since 2012, Naftogaz failed to fully intake the contracted volume. The reason the volumes of contractual gas has been reduced to such a small amount is the take-or-pay provisions remain in place, but apply to only this vastly reduced volume of gas.

All of these terms relate to gas that Ukraine buys for its own use. We take their gas, sell it on the stock exchange and get money.

Gazprom demanded that Naftogaz should pay arrears for gas that had been supplied earlier.

Naftogaz said Friday that Gazprom had not only refused to resume deliveries meant for it, but lowered the pressure in gas pipelines by 20 percent and minimised sales to other customers. Summing the two awards, Gazprom has been left with a bill of $2.56bn.

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