Gazprom Refuses Deliveries to Ukraine, Contests Ruling

Russian giant Gazprom has not delivered gas so far to Ukraine, the importer Naftogaz Ukrainy said March 1.

The latter has managed without Russian imports for around two years but recently said it planned to resume them. There are no reports that Russia's non-delivery to Ukraine has any impact on its supplies to the wider European market.

"We received an invoice from Gazprom to be paid by us for gas, which was supposed to be supplied by Russians in 2018 within volumes and conditions under the Stockholm Commercial Court (SCC) award," said a Naftogaz spokesperson. The Russians have returned the money without any explanation; Naftogaz told NGW in an email that it considered this "a violation" of the SCC decision and plans to demand financial compensation for financial losses incurred.

Under the SCC ruling on the gas import contract, Gazprom was entitled to sell a minimum of 4bn m³/yr to Ukraine, and Naftogaz said last month that, as Russian gas was cheapest, it intended to buy it.

Gazprom said it is not satisfied with the SCC rulings which it finds contradictory: on the one hand, Ukraine was allowed to buy less gas than contracted because its own economy had shrunk; on the other, the court rejected Gazprom's defence of shipping less gas across Ukraine because its other customers' demand had shrunk. This had resulted in a significant imbalance between the two companies' mutual relations, it said March 1, which violated Swedish law. It said it would defend its rights using all applicable legislation.

However Gazprom did claim some victory: the court refused to allow the contract to be amended to boost the transit fee; and it also ruled that EU competition law and Ukrainian anti-monopoly law did not apply to the contract. Out of the $17bn Ukraine demanded, the court awarded little over a quarter: $4.673bn, equating to a net payment to Ukraine for both contracts of $2.56bn.