Ukrainian gas company Naftogaz has submitted for arbitration a US$11.6-billion claim for revision of the tariff in its gas transit contract with Gazprom.
The revision request was filed last week in Stockholm after negotiations between the two firms broke down. Naftogaz said the Russian gas export monopoly had not been constructive in the talks, leading to arbitration.
It said the transit contract signed by the parties in January 2009 did not reflect current market conditions.
Naftogaz said: “Significant changes in the European gas market, in particular, the rules for setting transit tariffs … and the fact that the tariff level does not correspond to the European level [were behind the Ukrainian claim].”
The current contract expires next year and the tariff revision being sought is due to be effective from March 2018.
Earlier this year, the Arbitration Institute of the Stockholm Chamber of Commerce rejected the revision “for procedural reasons”.
After the ruling, the Naftogaz Supervisory Board decided to pay US$46.3 million in bonuses to its management following the victory in a gas dispute with Gazprom.
Gazprom was told to pay US$2.6 billion to Naftogaz.
The Naftogaz bonuses were divided into two disbursements. In May 2018, the first part amounting to US$20.7 million, was paid out. The sum accounts for up to 1 per cent of the dispute win already detailed in the Naftogaz financial statements for last year.
Recently Gazprom accused the Stockholm arbitration court of mishandling the award because of third-party interference, and Naftogaz going to other European countries, principally the UK, to seize Gazprom’s overseas assets.
Last Thursday, Gazprom said Moscow’s energy ministry authorised the disclosure of information about its assets in England and Wales in line with an order from an English court. The assets include Gazprom’s stake in the Nord Stream 2 pipeline project linking Russia with Germany, which was pledged as collateral.
Gazprom deputy chairman Alexander Medvedev said: “Gazprom will certainly continue to challenge all actions taken by Naftogaz to enforce the Stockholm Arbitration Court’s awards. According to the Swedish court’s unambiguous ruling, enforcement must be suspended until a verdict is reached on our appeal.”
In early June, Ukrainian Prime Minister Volodymyr Groysman appealed to Naftogaz to review the recent decision to pay the bonuses.
Ukraine’s Prosecutor General Yuriy Lutsenko also said his office would also check the legality of Naftogaz giving out such large bonuses.
Some opposition Ukrainian MPs criticised the bonuses and Groysman asked Naftogaz’s Supervisory Board to reconsider the decision, calling it “excessive”. His request was turned down.
Gazprom contributes a significant slice of Russian GDP. Picture credit: YouTube