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    Ukraine Takes Money from Gazprom's Transit Payments

Summary

The money is about a tenth of the interest owed on the unpaid Stockholm award.

by: William Powell

Posted in:

Natural Gas and LNG News, Europe, Corporate, Litigation, TSO, News By Country, Russia, Ukraine

Ukraine Takes Money from Gazprom's Transit Payments

Naftogaz Ukrainy notified Russian gas exporter Gazprom October 10 that it is taking more than $9mn from Gazprom's excess transit payment for August as part payment for money owed.

The Arbitration Institute of the Stockholm Chamber of Commerce awarded the Ukrainian supply and transport company $2.56bn damages in its February 28 ruling, but Gazprom did not recognise the decision and has refused to pay. The interest is now at $100mn, Naftogaz said.

On December 22, 2017, the Stockholm institute revised the gas pricing formula for Gazprom's gas supply contract to Ukraine, lowering it, which automatically led to a reduction in the cost of services and the total cost of gas transit services provided by Naftogaz. That led to a net award against Gazprom of $2.56bn, which is now about $2.65bn after interest and the October 10 deduction.

By consistently refusing to comply with the decision of the Stockholm arbitration, Gazprom in 2018 continues to pay a higher price for transit than Naftogaz would charge, using the tariff decided by arbitration, Naftogaz said.