Ukraine Claims Take or Pay Victory: Update
(Adds details, more comment from Naftogaz)
Ukraine's state-owned gas monopoly Naftogaz has won its take-or-pay case against Russian exporter Gazprom, it said December 22, as the Arbitration Institute of the Stockholm Chamber of Commerce "completely rejected" Gazprom's claims for $56bn for gas deliveries between 2009 and 2017.
The tribunal also found that payment for gas delivered to someone other than Naftogas in the occupied territories of the Donetsk and Luhansk regions should not be Naftogaz' responsibility.
A second arbitration, on whether Gazprom honoured its transit contract with Naftogaz, is expected in late February, so the final settlement and awards might not be decided until then.
Naftogaz will still have to account for some of the gas it should have taken: it said it had succeeded in reducing contract volume obligations from 52bn m³/yr to just 5bn m³/yr. The contract is due to expire in 2019 and Ukraine has bought no Russian gas for a little over two full years.
“Naftogaz will do its utmost to implement the decisions by the Tribunal in good faith. Final clarity on who owes what and to who, how it will be paid and when and how it would be enforced may not come until February”, said chief commercial officer of Naftogaz Yuri Vitrenko.
The gas it did have to buy from Gazprom was made cheaper by 27%, from $485/'000 m³ to $352/'000 m³. It said as a result of this revision it has saved $1.8bn on deliveries in 2014-2015. And the destination clause and other discriminatory provisions in the contract have been declared invalid, bringing it into line with current European market standards.
Naftogaz estimates the total positive financial effect of the arbitration over the lifetime of the supply contract at over $75bn. Naftogaz is also claiming up to $16bn in transit contract arbitration against Gazprom, and a decision on that is expected February 28.
A company official told NGW that she had not yet seen the text of the ruling but said that the new price formula for duration of the contract would be 'hub zero' rather than a premium to a hub, although she could not say which hub. Further details are expected later in the coming days and there was no statement on Gazprom's website on the arbitration result at time of press.
The gas transit arbitration will resolve Naftogaz's claims for revision of the transit contract in conformity with mandatory European and Ukrainian competition and energy law; revision of the transit tariff and consequent monetary claims; and compensation for under-deliveries, it said.