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Gazprom has been supplying natural gas to pro-Russian separatist territories in eastern Ukraine and charging Kyiv’s state-owned company Naftogaz for it, Ukrainian UAWire reported, citing figures from the Russian company.
Indeed, in its second-quarter report, Gazprom has included 1.389 billion cu m supplied to Ukraine. However, official supplies to the country from Russia were suspended in 2015, amid a dispute between Gazprom and Naftogaz over pricing and supplies. Transit deliveries continue, to Europe, but Gazprom is planning to reduce the amount it transits through Ukraine in the future, through Nord Stream-2 and other alternatives.
The Ukrainian website noted that it has been 600 days since Gazprom suspended all gas deliveries to Naftogaz, but is now charging the state company for the gas it supplied to separatists, at US$306.6 per thousand cu m, based on prices for the first quarter of the year.
In fact, UAWire says, Gazprom has been supplying separatist republics in eastern Ukraine with gas for two years now but adding the payments due to Naftogaz’ bill. The Ukrainian company has repeatedly said it would not pay for gas deliveries through two gas-metering stations in eastern Ukraine, so these could not be added to its bill, the website explains.
The dispute has been going on for three years now. Essentially, Gazprom claims it has made deliveries to Ukraine that it hasn’t yet paid for in full. Naftogaz, for its part, counters that Gazprom has been overcharging it unfairly and it will not pay the higher price.
The case was brought before an arbitration court at the Stockholm Chamber of Commerce, with Naftogaz seeking US$30.3 billion from Gazprom, and the Russian company claiming US$47.1 billion, under this dispute and another one, in which Naftogaz wants higher transit payments from Gazprom for the gas going into Europe.
In a preliminary ruling, the Stockholm court ruled in favor of Naftogaz, at least according to Naftogaz. According to Gazprom, the ruling was just a stage in the court process, Reuters reported at the time. Last month, the Arbitration Institute of the Stockholm Chamber of Commerce said it would issue its final ruling by November.
By Irina Slav for Oilprice.com
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Irina is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing on the oil and gas industry.