Gazprom Announces Decision To “Immediately” Stop Gas Supplies To And Through Ukraine

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On March 1, Russia’s Gazprom announced its decision to “immediately” stop gas suppleis to and through Ukraine and to terminate of gas contracts with the country’s Naftogaz.

“The Stockholm arbitration, guided by double standards, adopted an asymmetric decision on our contracts with Naftogaz of Ukraine regarding supply and transit of gas. The decision seriously violates the balance of interests of the parties under these contracts. The arbitrators ground their decision by the fact that the situation with the Ukrainian economy has drastically worsened. We are totally against the situation when Ukraine’s economic problems are solved at our expense. In this situation, the continuation of the contracts’ validity is not economically feasible and unprofitable for Gazprom,” CEO of the Russian gas giant Alexey Miller told media, according to the Russian state-run news agency TASS.

On February 28, the Arbitration Institute of the Stockholm Chamber of Commerce imposed a $2.56-billion penalty on Gazprom over its gas transit dispute with Ukraine’s national oil and gas company Naftogaz. The Russian company disagreed with the ruling and voiced its intention “to protect the rights which are available to it under the applicable law.”

The decision of the Stockholm arbitration grounded by political and economic problems of one of the sides directly undermines foundations of the international private law and the system of arbitrations. The Stockholm arbitration’s decision became a cause used by Gazprom to cut off its ties with Naftogaz. Recently, Gazprom had used only about 55% of a full capacity of the Ukrainian gas transport system. Considering a rapid development of the Russian pipeline projects, the Ukrainian pipeline just becomes useless.

TASS recalls “Gazprom vs Naftogaz dispute ” (source):

Gazprom and Naftogaz signed the current contract for the supply of gas to Ukraine in January 2009 and it is valid until December 31, 2019. Under the contract, the volume of supplies was to be 40 billion cubic meters of gas in 2009, and starting from 2010 – 52 billion cubic meters annually. However, since 2012, Naftogaz failed to fully intake the contracted volume. Since November 2015, Kiev has not bought Russian gas, replacing it with reverse gas from Europe.

In 2014, Gazprom and Naftogaz filed lawsuits against each other in the Stockholm Arbitration.

Ukraine sought a retroactive price change, recovery of overpayment for gas and cancellation of the “take or pay” principle.

Gazprom demanded that Naftogaz should pay arrears for gas that had been supplied earlier. Gazprom’s demands for Naftogaz amounted to more than $37 bln.

The Stockholm Arbitration satisfied the requirements of the companies only partially.

In December 2017, the court ordered Naftogaz to pay Gazprom $2 bln for the deliveries, but reduced the annual contractual volume of purchases to 5 billion cubic meters.At the same time, the “take or pay” condition was preserved for 80% of this volume. This condition will be effective only in 2018.

The court also rejected most of Naftohaz’s claims to Gazprom which concerned overpayment for gas. Only the price of gas received by the Ukrainian company in the second quarter of 2014 was lowered (from $485 to $352 per 1,000 cubic meters). Naftogaz wanted a retroactive price change starting from May 2011.

In the gas transit contract, Naftogaz and Gazprom agreed that the Russian holding will pump 110 billion cubic meters of gas through Ukraine annually. However, the contract notes that the annual volume is specified in additional agreements to the contract, depending on the obligations of Gazprom to European consumers.

Naftogaz demanded that Gazprom should pay $17 bln for the failure to supply the agreed volumes for transit. It also sought the revision of tariffs and conditions for the transit of Russian gas through Ukraine.

The Stockholm court ruled that Gazprom should pay about $ 4.7 bln to Naftogaz (taking into account the satisfied counter claims, Gazprom has to pay $ 2.56 bln). At the same time, Gazprom said that the arbitration court rejected Naftogaz’s demands to increase the tariff for gas transit and change the contract in accordance with Ukrainian legislation.

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  • Robert Ferrin

    AMEN about time !!!!!!!

  • leon mc pilibin

    Now let’s see a real maidan,anti Zionist one.

    • Bolter10

      …?

      • leon mc pilibin

        An uprising against the zionist coup plotters that have destroyed Ukraine.

        • George King

          The first one as for normal people was for the removal from power of the oligarchs and corruption. It was taken over (hijacked) by US oligarchs using thug neo-nazis enforcers and paid assassin snipers all bank rolled and setup by US front person Neuland. All documented including Kerry’s and Biden’s pillage and plunder hands caught in the cookie jar.

    • FlorianGeyer

      I would certainly support that Leon :)

      In every EU country ,the USA, Australia and New Zealand , just get the ball rolling :)

  • Ulriuch Schliz

    The article does no completely clear,what was the arbiitrition about or what is really the dispute.

    • Ger

      Ukraine was stealing Russian gas as it transited their territory. Gazprom upped the price for the gas allotted to Ukraine to make up for the stolen gas. Ukraine filed complaint in an arbitration process wherein the Russians (Gazprom) are signatories. The western lackeys found in favor of Ukraine. Gazprom says, no problem, here is your money and shut off the valves and pumps. Now the Ukrainians have no gas and no coal …. morons?! Somewhat paraphrased but close.

  • as

    Go ahead coerce anybody else USA. No bribes now only guns.

  • velociraptor

    if gazprom stops, will pay horrible sums.

    • Daniel Miller

      why? Gasprom has now supply lines to China as well as nord stream 2 and nord stream 1…Ukrainian route only was running at 55% of its full output so they wont lose anything sice that will be covered by both nord streams as well as turkish stream.

      • velociraptor

        arbitrary decision. it is a must to accept for both sides. in this business you can not reject to fullfill the contract. in the contract is also named the arbitrary court. and it will decide against side, which did not filled its part.

        if gazprom will not pay, on the all earth will be confiscated its good until the money is not gathered.

        • Daniel Miller

          errrr no if your cliant did not pay for your product and missed all deadlines to pay then its more then legal to stop all gasflow to Ukraine.

          • velociraptor

            again: arbitrary court is named in the contract. whatever is the decision, it is a must for both sides. this ia according international and trade law.

          • Mish

            “arbitrary court”? be quiet, joker!

          • Igor Dano

            u talk rubbish.

          • ruca

            Don’t bother with the velcro-crapper. He’s here to water down the discussion. He will twist everything you write.

        • FlorianGeyer

          You really are an idiot Velo.

          • velociraptor

            after you

          • Suyanto Ng

            craptor

        • Igor Dano

          once again bs.
          your statement has no business merit.

      • velociraptor

        another thing.
        nord stream will solve nothing.

        for transport of gas gazprom has long lasting contract. with all central european countries, not only ukraine and belarus.
        in this contract is exact number, which is the minimum m3 transfered and for this volume gazprom MUST pay transport fee, also if 0 m3 will be transfered. until date, the contract expires.

        • Igor Dano

          u talk bs.

    • Anti_Globalista

      Who’s gonna make them?

  • Alphonse T

    I’m surprised it took so long. The ukrainian putschist government doesn’t deserve any help.

  • gustavo

    Ukraine has now something very serious to think about, let us see how the fascists solve this problem now.

    • velociraptor

      ukraine does not get gas from russia. 100% takes from EU.

      • FlorianGeyer

        The EU is currently having a very cold spell and gas prices have spiked , with gas reserves being very low. :)
        There will be no gas for Ukraine I suspect.

        • velociraptor

          bullshit. i know better the eu.

          dont come aut from shitty uk. brits are stupid, the continental people clever.

          thanks for brexit, there is nothing in the way to USE

          the brIN was the biggest mistake.

        • Merijn

          Here in Holland we got Earthquakes because we sucked up all the gas and the earth has to reset itself a bit here & there….we need the Russian gas…. so please, please don’t turn of the supply of gas Mister Putin…. or we will be in deep shit…..

          • Thruth12k

            lol

      • Sinbad2

        Yes, Ukraine buys from EU, and EU buys from Russia.

        • velociraptor

          nice way. that means, hazprom does not sell to ukraine.

      • King_GeorgXIII

        And the Eu takes 100 percent from russia!

      • Justin

        This is a big problem for Europe! Russia is the only group who can supply Europe with CHEAP gas other than Azerbajan but they nt have the amounts like russia does! It will be the EU who force Ukraine to beg back to russia because Europe needs its gas! We can be sure that the Russian hubs (Germany) will massively raise prices!

      • Floyd Hazzard

        But it collect transfer fees which will now vanish

      • Bob

        Ukraine claims it buys ‘EU gas’ – but it is essentially still sourced from, wait for it, Russia. And furthermore Ukraine currently pays more for ‘EU gas’ that it would have for direct Russian Gazporom gas. A truly epic fail. See:

        https://www.forbes.com/sites/kenrapoza/2016/02/02/ukraine-boasts-european-gas-imports-but-most-of-it-still-russian/#77557e4a6df9

        https://oilprice.com/Latest-Energy-News/World-News/Ukraine-Pays-20-More-For-EU-Gas-Than-It-Would-Have-Paid-To-Russia.html

        • velociraptor

          uýkraine buys gas from eu. it does not play any role, what is the origin of gas, which sell eu. btw., eu has diversificated resources and will decrease the amount of russian gas to 30%.

          you can barkk, but the fact is, ukraine has zero dependence on gazprom, and this fascist oorganization can not influence ukraine. that is what i told and that is right. you are chewing a shit!

          • Bob

            EU gas is from Russia – it’s renamed and to Ukraine. It is more expensive because it has traveled further and gone through hands of multiple companies all taking a profit cut. Ukrainian gas policy is the definition of an own goal. It would be funny, if it wasn’t so incompetent.

    • TheLulzWarrior
      • Rita Munson

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  • Ger

    The decision was delayed fearing Gazprom would follow this course … in the dead of winter.
    NordStream II, III and IV now on the way to Europe?

    • FlorianGeyer

      I hope so.

      • Ian Thomson

        I believe I heard that Germany and Austria would not honor the US sanctions on Nord stream 2. If that is true, that is the best possible news for Europe because it means Europe will have security of energy supplies into the future. I think it would be disastrous to place in the hands of the Americans , the leverage of being the only gas supplier to Europe . Russia has never turned off the gas to Germany, and it would not be in the economic interests of Russia to do so.

  • Serious

    Stop gas supplies to Europe.

  • Serious

    It’s so stupid to sell gas and oil. Unless you are a sand country with nothing as ressources, it’s so stupid to sell gas and oil. And the sand countries who rely on selling gas and oil will have the biggest back fire ever when oil and gas will be exhausted.

    • ruca

      How is it stupid? The revenue built up the Russian military to an extremely high level.
      Someone else would make that money if Russia didn’t.

      • Serious

        It’s stupid to sell and even most stupid to sell to your ennemies. And it’s prevent you from building a real economy.

        Of course, it’s better to use the oil and gas to build airplanes, cars, … and get the money rather that sell oil and gas to your ennemies so that they can build airplanes, cars, .. that you buy in return. XD.

        • FlorianGeyer

          The European people in general do not hate Russia.
          It is only the NATO Leaders and Friends of Israel who dislike Russia .
          Sadly , all to many Americans love Israel but that is now changing as the true facts of history become easier to access.

        • Sinbad2

          No it doesn’t prevent you from building a real economy, it allows you to finance the real economy, without borrowing from the Shylock’s.
          If it wasn’t working, the US wouldn’t be trying so hard to stop Russia selling oil and gas.

        • ruca

          If they don’t sell to their enemies, someone else will get that income.

  • Serious

    Russia sells oil and gas to Europe but has no control on them. It’s so weird. Why does Russia sell gas and oil to Europe. Let them die.

    • Sinbad2

      Money baby, to defeat these fkrs you first have to take the money they stole from the Africans and Asians. When you have all their money, then you finish them off.

  • Gregory Casey

    Sounds as though it may suddenly become extremely cold for the Peoples of Ukraine !! What a time of year the Stockholm Arbitration system chose to come up with this decision !! Sincerely to be hoped that the ordinary Peoples of Ukraine will not suffer because of this and that any cuts in supply are imposed on industrial and commercial output.

    • Serious

      As if USA cares about Ukraine ? XD. Nuland said “Fuck EU”.

      USA has stolen syrian gaz and oil. Europe has stolen libyan gas and oil.

    • XRGRSF

      Why shouldn’t the “ordinary” people of Ukraine suffer? The “ordinary” people of Ukraine are responsible for the actions of the government that they have elected. Are you OK with the “ordinary” people of Donbass suffering deprivation, and death imposed on them by the “ordinary” people of Ukraine?

      • Ronald

        @ XRGRSF: Have no fear my friend, the ordinary people are always the ones who fact suffer. We only wish that the “government that they elected,” was in fact elected.

      • Gregory Casey

        I might agree with you if I thought the Government of Ukraine truly represented the people of that benighted country but I actually don’t believe that it does. Ukraine is being ‘governed’ by gang of plundering dictators.

        • XRGRSF

          I agree that Ukraine’s leaders are plundering the country, but it’s hard to call them “dictators” when they were duly elected by the citizens of Ukraine. They were not only elected once, but have been elected several times in what appear to be fair, and open elections. The old saying applies, “In a democracy people tend to receive the government that they deserve.”

  • Joao Alfaiate

    Call Victoria Nuland! I’m sure she has the solution!

    • velociraptor

      yup, the javelins are on the way.

      • Suyanto Ng

        yeah, they can warm their arse and your home with javelin

        • Marcos5

          It will be a show i must say, Javelin Vs Kornet. Till St. Petersburg catch-up starts jamming the pods and use drones at the same time prowling for technicals.

          Kiev does not look good this midsommer the galactic order is in chaos. Poroshenkos chocolate are too sweet, i will stay with Kinder.

    • AND shell bring the cookies.

  • wimroffel

    With record low temperatures in much of Europe this is a declaration of war. This is bound to work out very bad for Russia.

    • bonami

      Not necessarily. This will force the EU/IMF to loan yet more money to Ukraine so that Ukraine can buy gas from the EU, at higher prices of course. Where will the gas come from, from Russia.

      • velociraptor
        • Suyanto Ng

          they will

          • velociraptor

            i see, you are another blocked idiot.

        • Sinbad2

          Naftogaz is owned by Joe Biden’s son, all of Ukraine’s assets now belong to the USA. They take over a country for money, it’s the American way.

          • velociraptor

            and how will thes negate my comment? UA does not need russian gas. So, gazprom will not cause colder winter. ;)

          • Sinbad2

            Excellent news, so the stories of Ukraine closing schools etc is just more of their propaganda.

      • Brad Isherwood

        Lol…..Ukronazi have to eat frozen Perogi.

        Dentists will be busy for next few months, …..that is…if Ukronazi have any money after Booze : )

    • VeeNarian (Yerevan)

      Well then, the EU should not have messed with Russia in the first place. Surely, Uncle Sam can help with more gas from his rear end for the EU vassal states???

  • Starlight

    YAWN- and tomorrow, when you aren’t looking, Putin will reverse the decision for the umpteenth time- this back and forth nonsense has been going on with Ukraine for years now- and Ukraine STILL gets Russian gas mostly for free- for that’s what the zionists of Ukraine want, and that’s what zionist slave Putin allows.

    Here’s a clue for the clueless. The humane, decent and good thing to do in Ukraine was to invade, peacefully end the conflict and oversee the PEACEFUL partition of Ukraine into at least two new nations. But Putin refused to do that, cos the zionists didn’t want it.

    However, the alternative was perpetual war, mass murder and ruination of innocent lives in East Ukraine- which is exactly what has happened there. And worse- NATO making the central authority in Ukraine ever more neo-nazi and fascistic and war-loving. There is good reason zionist shills like The Saker screamed so very loudly that Russia must NOT invade Ukraine. Ensuring Russia stays ineffective on the world stage is the no.1 job of agents like Saker.

    PS the recent slaughter by the USA of elite russian irregulars in Syria was blow-back from Putin’s limp-wristed pro-zionist strategy in Ukraine. The russians murdered by the yanks, with Putin’s explicit permission (america didn’t start the strikes until russia gave them the greenlight) were associated with East Ukraine- the very people that defended the region, in the hope of a lasting settlement there. But Putin betrayed them and the people they defended. And now Putin sees these disaffected Russian heroes as a ‘threat’.

    You cannot both serve the zionist cause and the Russian people. Putin chooses zionism.

    • “The humane, decent and good thing to do in Ukraine was to invade, peacefully end the conflict and oversee the PEACEFUL partition of Ukraine into at least two new nations. But Putin refused to do that, cos the zionists didn’t want it.”
      ————–
      It would also have given the US just cause for a NATO war against Russia. Ie., a stupid idea.

  • Andrei

    Hei people are you living in this world
    All countries attack Russia
    if Russia it will lift a finger against European union they will feel the real Rusian pain
    No countries should ever provoke Russia
    I live near Russia, you don’t have the smallest idea what Russia is capable of, only a country like USA have the stupid idea in provoking Russia, Europe will suffer because of IDIOTS OF USA,but they should remember that technology has advanced and THE IDIOTS FROM .U.S. THEY CAN GET HIT AS WELL
    BY MISSILE . So please stop playing with fire
    You will get burn in the end. Ukraine had contract whit Russia about Crimea read the
    History.

    • velociraptor

      you don’t have the smallest idea what Russia is capable of,

      tell us!

      • Suyanto Ng

        you know jacksh*t!

  • Andrei

    You are just stupid thinking that is a declaration of war. A war with Russia will kill all your children. Will be the end of PEACE in the world. Do you know how many countries will back Russia? China,India,even Ukraine,North Korea,Japan,Vietnam,…and many more other who actually hate or had a bad encounter whit USA

    • velociraptor

      go to sleep

  • Kiev will probably respond by trying to attack Donbass again and getting destroyed while pleading to NATO to attack Russia.

  • Andrei

    I don’t take any side but a war whit Russia will destroy the world. I don’t see it happening but you know “” never say no””

  • zman

    With the US being behind Ukraine’s woes and continuing to exacerbate issues, they owe it to Ukraine to send Nuland back over with some fresh baked cookies and have the Donald accompany her. Warm cookies and all the hot air they could ask for, they’re saved!

  • Sensible decision – those Ukes are far more trouble than they are worth.

  • Sinbad2

    This is a win for Russia, if the EU is forced to buy the overpriced American gas, energy hungry EU companies will move their factories to Russia.

  • BlackisNOTWhite

    So, to clarify, Gazprom ignores international law and an international court’s decision, and rather than following standard legal procedure, which is to follow the court’s ruling, while appealing the decision, instead, in breach of its contractual obligations, and in contravention of the court’s ruling, cuts off supplying Ukraine for gas that had already been paid for and that it was contractually obligated to provide, I doubt they followed the termination of supply contract clauses. I see huge damages and compensation also coming Naftogaz’s way, stupid knee-jerk reaction from Gazprom that will seriously inhibit its business opportunities in the future.