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Naftogaz: Gas transit conditions set by Gazprom "absolutely unacceptable"

The Russian monopoly’s reluctance to transmit gas via Ukraine in line with European rules increases Naftogaz’s chances to win $10 billion in compensation in litigation over the lack of gas transit after 2019, that’s according to Yuriy Vitrenko, Naftogaz of Ukraine Chief Commercial Officer.

“If the Russian Federation continues to provide Gazprom with exclusive opportunities for gas transit from the Russian territory to Europe via Ukraine, and at the same time fails to agree to the standard European conditions, Naftogaz has a real opportunity through the new arbitration, which has already been launched, to get about $10 billion in compensation for the lack of transit after 2019,” Vitrenko wrote on Facebook, commenting on the statements of the Russian side about the readiness to continue transit, but under conditions that are beneficial only for the Russian Federation.

Such possibility should “help” Gazprom take a more constructive position in negotiations on transit after 2019.

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Also, Vitrenko noted that the existing gas transit contract between Naftogaz and Gazprom fails to meet the requirements of Ukrainian and European legislation, so it cannot be renewed.

According to the senior Naftogaz official, the Russian side says it is possible to prolong the gas transit contract possible if Naftogaz voluntarily renounces its requirements to Gazprom to fulfill the arbitration award, and also relieves Russia in the new agreement of its obligations on transit volumes.

“Both of these conditions are absolutely unacceptable for Naftogaz, and the European Commission supports us in this regard,” he stressed.

At the same time, Vitrenko explained that appealing arbitration awards does not exempt Gazprom the obligation to comply with them, and neither does it suspend or delay the implementation of these awards.

Naftogaz is also not going to give up on $4.6 billion it has won in a gas transit case, not to mention $2 billion it won in the case into gas price revision, as well as a suit filed to cancel Naftogaz’s obligations to Gazprom worth about $80 billion under the take-or-pay clause provided by the gas supply contract.

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As UNIAN reported earlier, on January 21 in Brussels, Ukraine-EU-Russia tripartite talks were held on gas transit issues after 2019. According to Minister of Foreign Affairs of Ukraine, Pavlo Klimkin, following the tripartite talks, Gazprom proposed to extend the existing contracts without the need for expert consultations.

Before the end of the negotiations, Naftogaz CCO Yuriy Vitrenko said that Naftogaz was ready to reduce the amount of claims against Russia’s Gazprom to $2 billion instead of the stated $12 billion if Ukraine decided to maintain gas transit via the Ukrainian territory.

In the summer of 2018, Naftogaz filed a new lawsuit with the Stockholm Arbitration claiming to revise the tariff for the transit of natural gas under its contract with Gazprom. Naftogaz is demanding a revision of the tariff from March 2018 to the end of 2019, tentatively estimating its claims at about $12 billion.