Naftogaz initiates new arbitration proceeding against Gazprom

Naftogaz initiates new arbitration proceeding against Gazprom

NJSC Naftogaz Ukrainy has filed a Request for Arbitration with the International Court of Arbitration of the International Chamber of Commerce in Paris regarding the actions of PJSC Gazprom.

“Naftogaz demands that Gazprom pay for the rendered service of organising natural gas transportation through the territory of Ukraine. Funds were not paid by Gazprom, neither on time nor in full,” Naftogaz said in a press release.

The head of Naftogaz, Yuriy Vitrenko, recalled that the 2019 transit contract was signed on the terms of “take or pay.” At the same time, Gazprom has been paying less since May than the agreement stipulates.

“We demand from Gazprom to pay in full. As the contract defines it,” he wrote on his Facebook page.

According to him, Naftogaz is also evaluating the possibility of announcing additional conditions to the Russian monopoly.

“We need to not only win the war against Gazprom, but also defeat Russia in its war of conquest against Ukraine. And although arbitration is always a difficult and lengthy process, I believe that Naftogaz will repeat the success of Stockholm 2019. And Ukraine is sure to win!” Vitrenko added.

As reported, Gas Transmission System Operator of Ukraine (GTSOU) declared a force majeure about accepting gas for transit through Sokhranivka, claiming that it cannot control the occupied Novopskov compressor station due to its Russian military aggression.

At the same time, the Ukrainian side insists that payment should still be made based on the estimated transportation volume of the long-term agreement at the level of 109 million cubic meters per day according to the “take or pay” rule.

In accordance with the Ukraine-Russia-European Commission intergovernmental protocol signed on December 20, 2019, on December 27-30, a package agreement was implemented with the payment of $2.9 billion by Gazprom to Naftogaz in accordance with the decision of the Stockholm Arbitration, the waiver of existing claims by the parties and the signing five-year transit agreement.

The agreement between Naftogaz and Gazprom for the organization of transportation, the transport agreement between Naftogaz and GTSOU, as well as the inter-operator agreement between GTSOU and Gazprom were signed on December 30, 2019.

The documents provide for the transit in 2020 of at least 65 billion cubic meters (bcm), at least 40 bcm in 2021-2024. Payment for the above volumes is guaranteed even in case of less pumping through the GTS of Ukraine.


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