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Russian Energy Minister: Gas Flow To EU Remains Reliable

Natural gas stove

Russia’s Energy Minister Alexander Novak has said that Russian natural gas deliveries to the European Union remain reliable despite the fresh dispute between Russia’s Gazprom and the gas company of Ukraine through which gas deliveries to the EU flow, the European Commission Vice-President for Energy Union Maroš Šef?ovi? said on Sunday.

Last week, just hours after an arbitration court had ruled in favor of Naftogaz in a long-running payment dispute between the Ukrainian state company and Gazprom, a fresh gas dispute flared up after Naftogaz said that Gazprom had not stood by its commitment to resume gas supplies, forcing Ukraine to reduce gas usage amid Arctic temperatures. The new rift comes after years of bitter disputes between the gas companies of Russia and Ukraine, exacerbated by the 2014 Russian annexation of Crimea.

Last Wednesday, the Stockholm arbitration court ruled in favor of Naftogaz in the payment dispute with Gazprom, ordering the Russian company to pay Naftogaz US$2.56 billion for failing to supply Ukraine with the agreed amount of natural gas over a period of several years and also for failing to pay the full transit fees for the gas it did pump in that direction.

Gazprom’s CEO Alexander Medvedev said the company had received payment from Naftogaz for gas to be pumped its way this month, but had returned it, because the two companies have yet to sign a supplement to their original contract reflecting the court’s ruling. Gazprom expressed its disagreement with the Stockholm arbitration ruling and said that “Gazprom will defend its rights through all means available under applicable legislation.”

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After talking to Ukrainian and Russian officials and representatives of Naftogaz and Gazprom, the EU’s Šef?ovi? said on Sunday that “For his part, the Russian Minister of Energy Mr Novak, gave reassurances that the transit of gas to the EU Member States is not endangered and remains reliable. Regarding the Stockholm Arbitration decision Vice-President Šef?ovi? has been informed that Gazprom remains set to terminate its contracts with Naftogaz. This procedure may, however, take some time and will not have immediate consequences on the gas flows.”

Šef?ovi? encouraged the two sides to seek resolution to the latest dispute and added that “I will follow the situation closely in order to ensure that the transit of Russian gas through Ukraine to the EU - as it remains our priority - is safeguarded at all times.”

By Tsvetana Paraskova for Oilprice.com

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