The Arbitration Institute of the Stockholm Chamber of Commerce has not satisfied a claim by NJSC Naftogaz Ukrainy for the review of gas transit rates stipulated in a contract with Russia’s gas giant Gazprom, the Ukrainian company said in a press release.
“The Tribunal has not supported Naftogaz’s request for the review of the transit tariff since the application for the review submitted by Naftogaz in 2009 did not meet the procedural requirements. Neither has the court satisfied Naftogaz’s claim for the review of the transit contract in accordance with European and Ukrainian energy and competition legislation, saying that regulatory reform in the territory of Ukraine is a matter for the Ukrainian authorities and does not fall within the Tribunal’s competence in this matter,” the press release said.
Naftogaz CEO Andriy Kobolev said that the company intends to suggest negotiations on the revision of the contract with Gazprom shortly.
“The Transit Contract will now need to be revised, taking into account the Award and the requirements of European and Ukrainian law. Naftogaz intends to suggest negotiations with Gazprom to this effect shortly. Following the Award, Naftogaz expects related gas market reform in Ukraine to continue at an accelerated speed,” he said.
As reported, the Arbitration Institute of the Stockholm Chamber of Commerce has obliged Russia’s gas giant Gazprom to pay $4.63 billion to NJSC Naftogaz Ukrainy for the failure to meet gas transit obligations.
Since the court previously ordered Naftogaz to pay Gazprom for gas supply arrears, Gazprom’s net payment after two arbitration disputes between the two companies on gas supplies and transit shipments will be $2.56 billion.
Naftogaz demanded that Gazprom should pay about $16 billion along with the review of prices of gas, the unblocking of the virtual reverse route and the possibility of concluding a transit contract for another operator.
According to the contract on gas transit signed by Naftogaz and Gazprom in 2009, the tariff for gas transportation across Ukraine is floating and it is calculated using the formula depending on the cost of the fuel and inflation in Europe.
Naftogaz in late December 2015 proposed that Naftogaz and Gazprom hold negotiations in relation to the adoption of the new rules for the formation of the tariffs for gas transportation in the country.
According to the decision of the National Commission for Energy, Housing and Utilities Services Regulation (NCER) dated December 29, 2015, from January 1, 2016 the tariff of $12.47 per 1,000 cubic meters is set for all entry points (Kobrin, Mozyr, Pisarevka 1400, Sudzha 1200, Sudzha 1400, Ustyluh and others).
For exit points the following tariffs are set: Ananyiv – $16.74, Berehovo – $31.03, Hrebenyky-ATI (Ananyiv, Tiraspol, Izmail) – $16.74, Hrebenyky-ShDKRI (Shebelynka, Dnipropetrovsk, Kryvy Rih, Izmail) – $21.33, Drozdovychi – $25.73, Oleksiyivka – $32.16, Orlivka – $23.12, Tekovo – $28.99, Uzhgorod – $32.80, Ustyluh – $25.73 and all the rest of exit points – $25.73. The commission also approved the requirements for consumption of natural gas for technical needs and standard consumption for exit points: Ananyiv – 1.73 percent, Berehovo – 2.58 percent, Hrebenyky-ATI – 1.73 percent, Hrebenyky-ShDKRI – 2.01 percent, Drozdovychi – 1.91 percent, Oleksiyivka – 2.65 percent, Orlivka – 2.11 percent, Tekovo – 2.46 percent, Uzhgorod – 2.69 percent, Ustyluh – 1.91 percent and other points – 1.91 percent.
The commission was authorized to set the above-mentioned rates under the law on natural gas, which was passed in spring 2015 to introduce European Union energy market norms in Ukraine.
