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Thread: No more Russian gas to Ukraine: Gazprom returns payment & stops deliveries

  1. #1

    No more Russian gas to Ukraine: Gazprom returns payment & stops deliveries

    Marcel Sardo- @Marcelsardo · 6 min.
    BANG! Russian Gas Giant GAZPROM just announced it has terminated all contracts with the Ukraine

    peter pobjecky - #FBPR- @peterpobjecky · 30 min.
    No more Russian gas to Ukraine: Gazprom returns payment & stops deliveries

    Gazprom terminates all contracts with Ukraine immediately

    The decision to terminate the contracts was made after the Stockholm Court of Arbitration violated Gazprom's interests.

    "The arbitrators explained their decision with the sharp deterioration in the state of the Ukrainian economy.
    "We are strongly opposed to Ukraine's economic problems being solved at our expense."
    In such a situation, the continuation of contracts is economically inexpedient and unprofitable for Gazprom," Miller said.

    The Stockholm Court of Arbitration, "being guided by double standards," made an "asymmetric decision"
    in the dispute between Gazprom and Naftogaz of Ukraine about contracts for the supply and transit of natural gas.
    The decision has violated the balance of interests of the parties under these contracts, the head of Gazprom said.


    There is 1 billion cubic meters in Austria. Eastern EU will probably completely run out of gas within 10 days.
    I have no idea if the above comment is true...
    there is almost always work arounds for gas distribution... so.. meh?

    There is more to this story... something about the EU court impugning/awarding Ukraine with a perceived 'damage' award
    of $2 billion?? Naftgaz (Ukraine distributor) and Gazprom (Russia supplier) have a long history of legal wrangling over payments
    for gas delivered/not paid.
    Last edited by goldenequity; 03-02-2018 at 04:31 PM.

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  3. #2
    Snow-hit Ukraine faces gas squeeze as Gazprom holds back supplies

    Gazprom's refusal to supply gas makes Ukraine close schools and universities

    Ukraine imposes restrictions on gas consumption

  4. #3
    So the Stockholm Court said Ukraine doesn't need to pay its bills because its economy sucks.
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  5. #4

    In Shocking Turn Of Events, Russia Now Owes Ukraine Billions

    Ukraine finally gets a win against Russia.

    State-owned gas company, Naftogaz, was awarded $2.5 billion in a lengthy, ugly legal battle with Russian gas behemoth Gazprom. The Stockholm Arbitral Tribunal ruled Wednesday on a years old dispute regarding natural gas transit fees in favor of the Ukrainians. Gazprom said they will appeal the ruling.

    Russia's revenge began immediately on Thursday when Naftogaz learned of Gazprom's decision not to supply gas to Ukraine this month. Naftogaz said it had already paid for deliveries and would turn to Poland for emergency supplies.

    Russia and Ukraine's bitter divorce has Gazprom at the heart of the fighting. When former Ukrainian president Viktor Yanukovych rejected a European trade deal in favor of cheaper Gazprom gas, Kiev erupted in protest. Many Ukrainians felt that Yanukovych was choosing Russian interests over sovereign, economic interests. Yanukovych was kicked out of power in 2014, setting off a firestorm of reactions by the Russians that ultimately led to the annexation of Crimea, a southeastern peninsula in the Black Sea and home to Russia's only warm water Naval port; and a separatist war pitting ethnic Russians and pro-Kremlin militants against the Ukrainian government in the Donbass region along the Russian border.

    The move led to sectoral sanctions on Russian energy and finance and has ostracized Russia from the West. As the story goes, the Russians are the Cold War bad guys once again. It all started in Ukraine with these two energy companies going at each other's throats. The Russians seemed to always have the upper hand.

    Gazprom is one of the world's leading natural gas producers. It has a market cap of roughly $58 billion.

    For the Euromaidan movement activist of Ukraine, a Naftogaz legal victory would normally be boring news. But today it is more like the nuggets flowing out of the Robert Mueller Russia investigation: if it makes their enemy look bad, it's a score.

    There are many scores to settle still. Gazprom has the muscle to pressure Naftogaz by any means necessary, insiders said.

    Yesterday's tribunal in Stockholm found that Gazprom defaulted on its shipment obligations and awarded damages of $4.63 billion. The award means Gazprom has to make payments to Naftogaz in the order of $2.56 billion after residual payments for gas delivered in 2014 and 2015 have been settled.

    “We are pleased that we won the arbitration case on major accounts. This is an important day for the people of Ukraine and for the future of European gas markets”, Naftogaz CEO Andriy Kobolyev said in a statement.

    Kobolyev has become a vocal opponent of Gazprom's planned Nord Stream II pipeline, connecting Russia to Germany via the Baltic Sea. The pipeline would sit adjacent to the already existent Nord Stream I. Kobolyev used the arbitration panel's ruling to take a swipe at the pipeline, which was sanctioned by Washington last summer but is not dead yet. He said today that Europe should "reconsider whether it is wise to let (Gazprom) strengthen its influence, which is already significant, on their market through the construction of Nord Stream."

    The Tribunal did not grant Naftogaz's claim for revision of the transit tariff because Naftogaz’s 2009 request for revision did not fulfill the procedural requirements. The Tribunal also did not accept Naftogaz's claims for revision of the Transit Contract based on European and Ukrainian energy and competition law, noting that the implementation of regulatory reform on Ukrainian territory is a task for the Ukrainian authorities and not the Stockholm court.
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  6. #5
    Here’s the case in a nutshell.

    Naftogaz and Gazprom entered into a 10 year contract in 2009.
    The contract fixed the prices at a discount.
    Under the contract Naftogaz agreed to take 40 billion cubic meters of gas in 2009 and 52 bcm each year thereafter.

    Beginning in 2012 Naftogaz cut back their take of natural gas from Gazprom and in 2014 following the Maidan coup, Naftogaz stopped taking any gas at all from Gazprom, as well as in 2015. This was done for political reasons and under pressure from Washington and the EU, and the EU rushing to supply gas back to Ukraine. Naftogaz also refused to pay for much of the gas it took from Gazprom in 2014. Once Naftogaz stopped paying for the product, Gazprom stopped delivering the gas. The EU however could not maintain enough supply to meet Ukraine’s demand. Thus Gazprom turned the gas supply back on to Naftogaz but on a pre-payment basis only for forward flow. Naftogaz still did not purchase the full quantities it promised under the contract.

    In 2014 both Naftogaz and Gazprom filed claims against each other.

    Gazprom sought payment for the gas delivered that Naftogaz did not pay for. Gazprom also sought damages for breach of the contract for failing to purchase the remainder of the gas obligated under contract. In total Gazprom sought $37 billion in damages.

    Naftogaz sought an order to retroactively change the price of the already discounted gas. Based on its desire to retroactively change the price, Naftogaz claimed it did not owe for the gas it had taken and had not paid for. Further based on its request to retroactively change the price, Naftogaz claimed it was entitled to a refund for what it had already consumed and paid for. Naftogaz further sought damages against Gazprom for turning off the gas after it stopped paying. Naftogaz sought a total of $17 billion in damages.

    Naftogaz argued that Ukraine’s economic situation should be taken into consideration concerning these events and its non-payment and demand to retroactively rewrite the contract price.

    The court denied Naftogaz’s request to retroactively rewrite the contract price. The court did award $2 billion to Gazprom for the gas delivered that Naftogaz had not paid for. The Court denied Gazprom’s claim for breach of contract based on Naftogaz’s stopping and not taking the full quantities promised. The court also ordered Naftogaz to begin buying 5 billion cubic meters of gas beginning with 2018. The court awarded Naftogaz approximately $4.5 billion on its counterclaim vs Gazprom for the period it stopped delivery after Naftogaz stopped paying and cut its purchases from the contracted amount. This resulted in the net award of $2.5 billion in favor of Naftogaz. In making these rulings, the reports are that the court took Ukraine’s economic situation into account in excusing Naftogaz’s failure to pay and its reduced purchases from the contract promises.

    Essentially this is the equivalent of a Court telling the landlord the tenant is excused from not paying rent if the tenant runs into a bad financial situation. Yet the landlord is still obligated to continue to provide all obligations for the remainder of the lease.
    Last edited by AZJoe; 03-02-2018 at 09:28 PM.
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  7. #6
    Ukraine begins seizure of Russian energy giant Gazprom's assets, citing Stockholm court decision

  8. #7
    Ukraine’s Naftogaz said on Tuesday that a Dutch court had approved its petition to freeze Gazprom assets in the Netherlands as the Ukrainian company seeks to enforce the payment of the US$2.6 billion award it was handed by an arbitration court earlier this year over the payment dispute with the Russian gas giant.
    At the end of February, the Stockholm arbitration court ruled in favor of Naftogaz in the payment dispute with Gazprom, ordering the Russian company to pay Naftogaz US$2.56 billion for failing to supply Ukraine with the agreed amount of natural gas over a period of several years and also for failing to pay the full transit fees for the gas it did pump in that direction.
    On May 29, Gazprom said that it had appealed the ruling of the Swedish arbitration court, and said that it is “asking for a complete reversal.”
    The next day, Naftogaz said that it had initiated enforcement of the US$2.6 billion court award in Switzerland and the Swiss authorities had started taking measures to seize Gazprom assets in Switzerland.
    Ukraine is seeking to seize Gazprom assets in Switzerland, the Netherlands, and the UK, Ukrainian President Petro Poroshenko was quoted as saying last week, and those assets could include shares of Nord Stream and Nord Stream 2 AG.

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