Ukraine and Russia discuss settling $3 billion arbitration dispute using gas

Ukraine and Russia are discussing the possibility of Gazprom paying the $3 billion owed by it according to the Stockholm Arbitration Institute’s ruling using gas, said Naftogaz executive director Yuriy Vitrenko in a broadcast of Radio NV.

“[Russian Energy] Minister Novak, who was at the talks, admitted that they are discussing the matter of implementing the arbitration ruling by supplying the corresponding amount of gas. We see some progress in the public statements. We’re talking about $3 billion worth of gas. That’s a lot of gas, a year of Ukraine’s imports,” said Vitrenko.

He also remarked that the ruling given by the Svea Court of Appeal (Sweden) on November 27 strengthened Ukraine’s bargaining position.

However, Vitrenko added that the default outcome remains for the transit of Russian gas through Ukraine to end on January 1, 2020.

On November 27, the Svea Court of Appeal dismissed Gazprom’s appeal of the Stockholm Arbitration Institute’s ruling in favor of Ukraine. At the end of February 2018, after two gas transit disputes between the Ukrainian and Russian companies, the Arbitration Institute had ordered Gazprom to pay Naftogaz $2.56 billion.

On November 19, Gazprom sent Naftogaz an offer to sign a new gas transit contract or to extend the old one which expires on January 1, 2020.

The Russian gas monopoly advised Naftogaz to waive the $3 billion awarded to it by the Arbitration Institute in exchange for a one-year gas supply contract with a 25% discount. The Kremlin has also voiced its support for bringing up the topic of gas transit at the upcoming Normandy Format summit.

  Naftogaz, Russia, Gazprom, Ukraine

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