Ukraine welcomes Stockholm court ruling on gas transit dispute with Russian Federation

Vincent Mundy  Bloomberg

Vincent Mundy Bloomberg

According to Reuters, Naftogaz will go to court again to claim compensation for Gazprom's latest failure to deliver gas. The decision was made public by the Deputy Chairman of the Board of the Russian company, Alexander Medvedev. "In such a situation, the continuation of contracts is economically inexpedient and unprofitable for Gazprom", Miller said.

Russian gas deliveries to Ukraine were supposed to restart on Thursday following a foreign court ruling aimed at ending years of disputes between Kiev and Moscow, including two halts to Russian gas supplies to Europe through Ukraine.

It follows Wednesday's worldwide arbitration court order for Gazprom to pay $2.56 billion (RM10.04 billion) to Ukraine's Naftogaz after weighing mutual claims and counter-claims related to gas supplies and transit.

Ukrainian President Petro Poroshenko said on Saturday Ukraine saw an increase in gas supplies from Poland, Slovakia, and Hungary, which has fully offset the impact of Gazprom's decision.

Naftogaz declined immediate comment on the decision.

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And he urged Ukrainian companies to adjust their operations to save gas, while power companies were ordered to switch to fuel oil where possible.

Gazprom's Miller is reportedly very unhappy with the terms of the deal that dictate both volumes and prices to the Russian gas company. Gazprom was claiming $37bn under the take-or-pay clause but the court ruled only the price of gas received by the Ukrainian company in the second quarter of 2014 was to be lowered from $485 to $352 per 1,000 cubic meters, whereas Naftogaz wanted a retroactive price change starting from May 2011.

The Chief Executive Officer of Naftogaz said that according to meteorological forecasts the low temperatures in the country will continue for a few more days, by March 4, after which the daily gas consumption will return to 160 million cubic meters from the current 200 million cubic meters.

Ukraine's state-owned gas pipeline operator Ukrtransgaz, however, said it had to take extra measures to ensure gas transit to its European customers.

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