NJSC Naftogaz of Ukraine has not been buying natural gas under a contract with Russia’s PJSC Gazprom for 1,000 days, since November 26, 2015, importing gas from the West.
As reported, inconsistent prices were behind Ukraine’s refusal to buy gas on its eastern border at the end of 2015. Late in December 2017 the Arbitration Institute of the Stockholm Chamber of Commerce revised the contractual formula in a contract between Naftogaz and Gazprom. By arbitration decision, the price of gas for Naftogaz shall be equal to the price of gas in the hub in Germany, whereas previously it depended on the price of gas oil and fuel oil.
However, on March 1 Gazprom refused to resume gas supplies to Ukraine, having returned $127.624 million paid by Naftogaz in advance. Gazprom thus violated the Stockholm Arbitration ruling, which adjusted the pricing under the contract between the two companies.
According to Naftogaz, it overpaid a third of the price because of an emergency gas purchase from Europe in early March and will require respective compensation from Gazprom. Such actions on the part of Gazprom also made it impossible for Naftogaz to abide by a Stockholm arbitration ruling under which it should buy minimum annual volumes of contracted gas from Gazprom. (Interfax-Ukraine/Business World Magazine)
