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.