Gazprom terminates gas supply contract with Ukraine's Naftogaz

Нафтогаз України

Нафтогаз УкраїниVerified account @NaftogazUK

Gazprom will have to make a net payment of United States dollars 2.56 to Naftogaz following the Awards in two gas Arbitrations.

It follows Wednesday's worldwide arbitration court order for Gazprom to pay $2.56 billion to Naftogaz after weighing mutual claims and counter-claims related to gas supplies and transit.

"Naftogaz succeeded on its claim for damages for under-delivery in Transit Arbitration with Gazprom".

"Clearly, gas supplies to Ukraine's Naftogaz will not be carried out from March 1", Gazprom's deputy head Alexander Medvedev said in a statement earlier on March 2.

The logo of Russian gas giant Gazprom is seen on a board at the St. Petersburg International Economic Forum 2017 (SPIEF 2017) in St. Petersburg, Russia, June 1, 2017. "These actions by Gazprom, which contravene the contract, which contravene the tribunal's ruling, which contravene the spirit of relations between customer and supplier and which, I think, will cause Gazprom a lot of political problems in Europe", he said.

Ukraine on Friday urged schools to close and factories to cut production after Russian Federation refused to restart natural gas supplies, putting the nation in the delicate situation of letting residents shiver to save on gas supplies.

In the past, rows over the gas prices between Russia and Ukraine resulted in suspension of Russian gas exports to Europe, notably in the winters of 2005-2006 and 2008-2009. As experts noted, the volumes of transit were included in the contract, however, there were no penalties in the documents and the Stockholm Arbitration established them independently.

Нафтогаз України
Нафтогаз УкраїниVerified account @NaftogazUK

"Based on the available information, the gas supply is now normal and stable".

She stressed that the Government of Ukraine had informed the European Commission about the Gazprom's interruption of gas supplies through the territory of Ukraine to the EU countries and a possible emergency situation in this regard.

The court also ruled that part of the price Naftogaz was supposed to pay would be reduced.

All of these terms relate to gas that Ukraine buys for its own use.

"The court procedure takes time, we are not stopping the flow of gas right now through Ukraine", the source said.

"Technically, Gazprom has been obliged to pay this sum since yesterday evening".

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