Naftogaz lodges new claim against Gazprom with Stockholm arbitration, demands review of transit tariff
NJSC Naftogaz of Ukraine on July 6 lodged a new claim against Russia's Gazprom with the Arbitration Institute of the Stockholm Chamber of Commerce, demanding the review of tariffs on gas transit, the Ukrainian company's press service said.
"Today, Naftogaz submitted a claim for revision of the tariff in its transit contract with Gazprom to arbitration in Stockholm. The transit contract between Naftogaz and Gazprom allows the parties to request a revision of the tariff in case of significant changes in the European gas market and if the tariff does not correspond to the level of tariffs in Europe," the press service said.
According to the company, in the Award rendered by a Stockholm tribunal on February 28, 2018, Naftogaz's claim for tariff revision was rejected for procedural reasons, and Naftogaz's substantive right to a revision of the tariff was therefore not decided in that award.
"Naftogaz submitted a request for revision of the tariff to Gazprom in March 2018, triggering negotiations pursuant to the contract. The reasons for the request are significant changes in the European gas market, in particular the rules for setting transit tariffs, after the contract was concluded in January 2009, and the fact that the tariff level does not correspond to the European level," it said.
According to Naftogaz, Gazprom has not been constructive in the negotiations, compelling Naftogaz to refer the matter to arbitration as provided for in the contract. Naftogaz requests a revision of the tariff with effect from March 2013, and has preliminarily estimated the monetary value of the claim at $11.58 billion, excluding interest.
Chief Commercial Officer of Naftogaz Ukrainy Yuriy Vitrenko said on Facebook on July 6 that the claim for $11.58 billion might be lowered if Gazprom fulfills certain conditions, for example if it books capacity for transit after 2019 and/or stops blocking transit of gas from Central Asia and exports by other Russian companies.
He also said a new arbitration process would take place in parallel to the one initiated by the Russian side in Stockholm. In that process, Gazprom is demanding that current contracts with Naftogaz for the supply and transit of gas be terminated. In response, the Ukrainian side demands compensation for losses due to Gazprom's refusal to supply gas in contracted volumes, those losses being the difference between the price under contract with Gazprom and the actual price of importing gas from Europe.