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Naftogaz, Gazprom in a dispute over who has won the arbitration on gas supplies

Gasoil News - Published on Wed, 27 Dec 2017

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Finance Apprise reported that both Ukraine and Russia said that they were winners in the gas dispute, which was seen by arbitration. The Stockholm Arbitration Court cut prices for Russian gas but confirmed Kiev’s obligation to buy it, albeit in smaller volumes. Since the coming of power to the pro-western government in Kiev in 2014, both countries have been in a conflict over gas supplies. Both Naftogaz and Gazprom want the other party to pay tens of billions of dollars of compensation, the case being referred to the Arbitration Court in Stockholm.

The arbitration decisions are very complex and have not been made public, and details have been reported only partially by both parties to the dispute.

Released the Ukrainian operator in a communique “Naftogaz won the arbitration.”

The Russian gas giant, said that “Despite the Naftogaz’s allegations, the arbitrators confirmed the main principles of the treaty and met much of Gazprom’s demands.”

According to the details revealed by both parties, the court has indeed lowered the gas price for the controversial period in 2014, but has refused to apply the reduction retroactively to the years for which Kiev wanted compensation. The court has also approved the “take or pay” principle, but has reduced the volume of blue fuel from 32 billion cubic meters to 5 billion cubic meters, which corresponds to real import needs, according to Naftogaz.

Ukraine stopped in late November 2015 any payments to Russia and started buying natural gas from European countries.

According to Gazprom, Naftogaz will have to pay 2 billion USD for overdue payments that were not made because of the price dispute.

Naftogaz, however, stressed that the court has satisfied the Ukrainian company’s request not to pay 56 billion USD on “take or pay”. The Ukrainian operator has estimated that the court’s decision has saved over 75 billion USD in disputes over the implementation of the contract for its entire term (2009-2019).

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Posted By : Rabi Wangkhem on Wed, 27 Dec 2017
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