Executive Officer of the Naftogaz Group Yuriy Vitrenko has reaffirmed the position of the Ukrainian side on signing a contract with Russia’s Gazprom on gas transit shipments after 2019 based on European rules and with unconditional implementation of the awards by the Arbitration Institute of the Stockholm Chamber of Commerce.
“The current transit contract between Naftogaz and Gazprom does not comply with the requirements of Ukrainian and European legislation, therefore it cannot be extended. To sum up, transit through Ukraine is possible on standard European terms, not Russia’s terms,” he said on Facebook commenting on a statement by Russia’s Deputy Foreign Minister Alexander Pankin. The latter said that Russia was ready to continue gas transit shipments through the Ukrainian gas transmission system “on the conditions that we need.”
Vitrenko reiterated that the balance between the companies had already been restored by the international arbitration awards and they are subject to immediate implementation, as indicated by a ruling by Sweden’s Svea Court of Appeal, according to which appealing the awards does not relieve the sides from the need to abide by them.
Naftogaz is currently in a new arbitration process, demanding about $10 billion from Gazprom as compensation for the possible absence of transit after 2019, Vitrenko said.
As reported, the first litigation between the companies in Stockholm ended in the winter of 2017/2018. The arbitration ordered Gazprom to pay Naftogaz $4.63 billion for the failure to supply the agreed volumes of gas for transit. Taking into account the court’s confirmation of the Ukrainian side’s debt for gas supplies before Gazprom in the amount of $2.018 billion, according to the results of two arbitration disputes between the companies for gas supply and transit, Gazprom must pay $2.56 billion to Naftogaz, but has not yet implemented this decision.
In July 2018, Naftogaz lodged another lawsuit with the Stockholm Arbitration demanding the revision of the transit rate from March 18, 2018, and reimbursement of approximately $12.5 billion from Gazprom. In its turn, Gazprom filed a lawsuit to terminate the gas transit contract with Naftogaz, which expires at the end of 2019. The arbitration combined the claims in one case.
Naftogaz also demands that losses for Gazprom’s failure to fulfill the gas supply contract (as amended by the previous arbitration) be compensated.
However, Naftogaz has already declared its readiness to reduce the amount of the claims against Gazprom from $12.5 billion to $2 billion, subject to the signing of a long-term contract for the transit of natural gas based on European legislation.
