Gazprom has started to terminate contracts with Naftogaz

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MOSCOW, March 3 - RIA Novosti. The Russian-Ukrainian gas conflict is gaining ground again. Gazprom today announced that it has begun the procedure for termination of contracts with Naftogaz.

"And the new case in the Stockholm arbitration on this claim" Gazprom "will absolutely be considered by another panel of arbitrators," said Alexander Medvedev, deputy chairman of the board of the Russian holding, told reporters.

The reason for the cancellation of contracts was the decision of the Stockholm arbitration, which obliged Gazprom to pay Naftogaz 2.56 billion dollars.

Gas disputes

Gazprom and Naftogaz are sued in the Stockholm Arbitrage since 2014. In December last year, the court ruled on a dispute over gas supplies, obliging Naftogaz to pay Gazprom $ 2 billion for the supplied fuel.

He also reduced the annual contracted procurement volume to five billion cubic meters of gas, but maintained the "take or pay" condition for 80% of this volume. Kyiv is obliged to buy gas in such volumes from 2018.

The new decision, which the arbitration issued on February 28, concerned a gas transit contract. The court partially satisfied the claim of "Naftogaz", which demanded $ 17 billion from Gazprom, and awarded him compensation of 4.637 billion. Given the previous decision, the Russian company had to pay 2.56 billion.

It is inappropriate and unprofitable

Gazprom did not agree with the latest verdict of the Stockholm arbitration. As the head of the holding Alexey Miller stated, the court passed an asymmetric decision, substantially violating the balance of interests of the parties.

According to him, arbitration was guided by double standards, when he motivated his decision by the fact that Ukraine had a difficult economic situation.

"We categorically oppose the economic problems of Ukraine at our expense. In such a situation, the continuation of contracts for Gazprom is economically unfeasible and unprofitable," Miller said.

In addition, Gazprom has refused to resume gas supplies to Ukraine from March 1 and said it had already repaid the prepaid received from Kiev. The reason for such a decision in the holding was the absence of an additional agreement to the contract, which is necessary for the start of deliveries.

Kiev, in turn, has blamed Gazprom for not complying with the verdict of the Stockholm arbitration and intends to demand compensation for losses. In addition, Ukraine stated that the country had a shortage of gas and limited its consumption.

Opinion of the lawyer

Gazprom's decision has a complete legal basis, says Maria Yarmush, specialist in international law. However, in her opinion, Ukraine is unlikely to agree to voluntary termination of contracts, because of this, it will lose huge sums that it receives for the transit of gas.

"If there is an arbitration clause in the contract for the termination of the contract, then our company will resort to arbitration. There are various options how to get out of these partnerships and break all contractual relationships," she said in an air of Sputnik radio.

According to Yarmush, the process can take from six months to a year.

She suggested that European countries would try to use their influence to pressure the arbitrators, but this is unlikely to help Ukraine to keep contracts.

"In any case, Gazprom is not a charitable company that supports the Ukrainian economy and which will be at the expense of supplying gas at unprofitable conditions only to support someone. The contracts must have economic justification and must be fulfilled by both parties. The contract in any case is foreseen - this is a civil right, written in any law. The main thing is that the desire to dissolve the relationship was announced, and realization is simply a matter of time, "Yarmush said.

She stressed that this is not another round of the gas war, but a completely sound step by the Russian company, when the partner acts badly, has an unlawful influence on the arbitrators and receives unreasonable solutions from them.

"Therefore, in this case, it is not necessary to wait for something else. For which they fought, then they started", concluded the lawyer.

The reaction of Europe

In the European Commission, the aggravation of the gas conflict raised concerns both for gas supplies to Ukraine and for transit to the European Union. Vice-President of the Energy Union of the European Union Maros Sheffovich called on Russia and Ukraine to immediately find a solution.

He emphasized that Moscow and Kiev should confirm their reliability both as an importer and a transitor in the issue of gas supplies to the European Union, and also expressed readiness to act again as a mediator in gas talks.

This readiness is not surprising, because Russian gas occupies 34.7% of the European market. "But the most important thing is that the demand for our Russian gas in Europe is growing and will continue to grow," Miller said in connection with this.

On the background of abnormal colds in Europe, Gazprom reports on daily new daily gas export records from abroad on February 21. So, only on March 2, the Russian holding put 713.4 million cubic meters. At the same time, record rates are recorded for the first time in the spring, although consumption volumes are usually reduced at this time.

Link: https://ria.ru/economy/20180303/1515690188.html