Russia's Gazprom begins termination of contracts with Ukraine's Naftogaz
Gazprom was unable to reach an agreement with Naftogaz on gas transit through Ukraine and sent a request to the Stockholm Arbitration for termination of the existing gas transit and supply contracts.
“Gazprom was ready to negotiate with Naftogaz of Ukraine on gas transit after 2019. However, Ukraine must justify the economic feasibility of transit through its territory,” said Gazprom's Deputy Chairman of the Board of Directors Alexey Miller.
On February 28, the Stockholm Arbitration Court satisfied Naftogaz's claims for compensation for the gas volumes for transit that Gazprom failed to supply.
After that, the Russian gas company notified Naftogaz of Ukraine about the beginning of termination of contracts in the Stockholm Arbitration and offered to proceed with the negotiations envisaged by the contracts in order to find a mutually acceptable solution.
On February 28, during the hearing on the Naftogaz vs Gazprom case, the Arbitration of the Stockholm Chamber of Commerce partially satisfied the claim of the Ukrainian company and decided that Gazprom should pay $4.63 billion for undersupplying the gas under the transit agreement.
However, considering Naftogaz’s debt for the already supplied gas, the amount would decrease to $2.56 billion. Gazprom did not agree with the resolution. The Russian company announced its intention to immediately begin the termination procedure of all contracts with Naftogaz.