Gazprom explained the termination of contracts with Naftogaz unwillingness to pay new fines

Gazprom explained the termination of contracts with Naftogaz
 unwillingness to pay new fines

Moscow. March 13. INTERFAX.RU – Gazprom decided to terminate contracts with Naftogaz in order not to pay new fines for 2018 and 2019, said Gazprom CEO Alexei Miller at a meeting with Russian Prime Minister Dmitry Medvedev.

Miller noted that “the Stockholm arbitration adopted an asymmetric decision that violated the balance of interests of the parties under contracts, for delivery and transit.”

“By decision of the arbitration, Gazprom has to pay Naftogaz $ 2.56 billion, but with the understanding that Naftogaz of Ukraine immediately made a statement that for the upcoming 2018-2019 until the end of the contract NAK Naftogaz of Ukraine “On the basis of the decision of the Stockholm Arbitration, there will be more penalties from us, and we will be forced to pay a few billion dollars.” Of course, in these conditions for us these contracts become economically inefficient, inexpedient from an economic point of view. fools termination of contracts by the courts through the Stockholm arbitration, but we have already lodged an appeal on a contract for the supply of gas to Ukraine until the end of March will be appealed under the contract for the transit procedure has been initiated termination of the contract in the prescribed manner “, -.. he explained.

“Undoubtedly, the decision to terminate the contracts is not very fast, apparently, it will take a plus or minus one and a half to two years, but there are currently no risks for transit to Europe through the territory of Ukraine, unless, of course, there are unauthorized selection by the NJSC “Naftogaz of Ukraine”, said Miller.

Gazprom expects that in the new proceedings the Stockholm arbitration will correct the imbalance of interests with Naftogaz, Miller said.

In turn, Medvedev noted that applying to the court to dissolve Gazprom’s contracts with Naftogaz “is a normal legal way to end the contractual relationship.” “All contracts have the property, as lawyers say, to change, arise, eventually they end their actions or be terminated in accordance with the established procedure, in this case, in a judicial order.” This is a normal legal way to terminate the contractual relationship. ”

Transit out of danger

There is no risk of gas transit to the EU, unless Naftogaz will not unauthorizedly take gas, Miller said.

“There are no risks for transit to Europe through the territory of Ukraine, unless, of course, there is unauthorized selection by Naftogaz of Ukraine,” he said.

Earlier, Russian Energy Minister Alexander Novak also noted that the dispute between Gazprom and Naftogaz will not affect the gas supplies to Europe. “On the contrary, historically the largest volumes of supplies to the European market are being realized in the current temperature environment, and Gazprom has once again confirmed itself as a reliable gas supplier for 50 years,” the minister stressed.

Influence from outside

Medvedev said the inadmissibility of attempts by EU and US politicians to influence the bilateral dispute between Gazprom and Naftogaz. “In my opinion, it is extremely important that all these proceedings take place within the framework of the existing legal order that the parties have determined, so that the disputing parties themselves – I mean Gazprom and the Ukrainian side – directly deal with this. “, he stressed.

“But with regard to other ways of influencing such relations, then, in my opinion, this is absolutely wrong.This has a very obvious political connotation.I mean some of the comments that officials from the European Union allow, and even that is completely paradoxical , from the State Department of the United States of America .. Neither the European Union, nor any other foreign ministries, have a relationship to bilateral relations between Gazprom and its Ukrainian counterparts, and this relationship needs an ur Except, of course, all the procedures: both the procedures for appealing, and the procedure for termination of the contract in the existing parameters, “concluded Medvedev.

The future of cooperation

Miller and Medvedev stressed that it is impossible to refuse to continue cooperation between Gazprom and Naftogaz of Ukraine, but Ukraine must prove the efficiency of the transit of Russian gas to Europe through its territory.

“In the current conditions, it is important to note that here the Ukrainian side must prove the economic efficiency and expediency of continuing the transit of gas through the territory of Ukraine and we are ready to listen and consider such a proposal, if suddenly such proposals will be made,” Miller said.

“Naturally, there is no need to close any options, it’s just a question of profitability, effectiveness of the contract,” the Prime Minister agreed.

The dispute between Gazprom and Naftogaz

Two arbitration disputes between Gazprom and Naftogaz lasted for more than three years in the Stockholm Arbitration: the court for gas debts – from June 2014 to December 2017, under a contract for transit – from October 2014 to February 2018. And until the end of the validity of contracts (transit and delivery) is less than two years (until the end of 2019).

On February 28, the Stockholm Arbitration ordered Gazprom to pay Naftogaz $ 4.63 billion for the shortfall in agreed volumes of gas for transit. However, taking into account the amounts previously awarded in favor of Gazprom for the supply contract, the arbitrators offset the counter claims, following which Gazprom is obliged to pay Naftogaz $ 2.56 billion.

On March 1, Gazprom announced that it received and returned prepayment of Naftogaz for March. The next day, Gazprom CEO Alexei Miller said that the corporation, after the decision of the Stockholm Arbitration, was not in its favor terminates contracts for the supply and transit of gas from Naftogaz of Ukraine.

On March 6, Gazprom reported that appealed to the decision of the Stockholm arbitration in the gas supply case, on the transit procedure, the appeal will be filed before the end of March 2018. In turn, NAK Naftogaz Ukrainy said that the appeal can be submitted solely on procedural matters, and not in essence the decisions of the Stockholm Arbitration.

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