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Stockholm court to determine price of gas purchased from Gazprom in mid-2014

The parties could not come to terms.

Stockholm court to determine price of gas purchased from Gazprom in mid-2014
Yuriy Vitrenko
Photo: Photo: oilreview.kiev.ua

Stockholm arbitration will determine the price of gas that Naftohaz bought from Gazprom in the second quarter of 2014, Naftogaz Group chief commercial director Yuriy Vitrenko wrote on Facebook on 14 November.

Vitrenko recalled that the price of gas under a contract with Gazprom for the Q2 2014 was 485 dollars per thousand cu m.

Meanwhile, gas shipments from Europe across Slovakia to replace Gazprom gas began only in the third quarter of 2014.

"In a separate decision of 31 May, 2017 the Stockholm arbitration court upheld our claim that the formula should be reviewed. The court decided that the formula should be tied to the quotations on the price of gas on the European market rather that the price of oil, as in the current formula. The court asked the parties to agree in the framework of this principle on the choice of quotations and relevant changes to the contract. The parties could not come to terms. Now, the arbitration will decide on the new price calculation formula," Naftogaz CCO wrote.

Naftogaz is sure that the new price formula for Q2 2014 will be significantly below 485 dollars.

On 7 November , Gazprom appealed against the interim decision of Stockholm arbitration in the lawsuit regarding the contract on gas supplies from January 19, 2009 and its derogation.

Stockholm arbitration on 31 May granted Naftogaz requirement to revise the prices based on market situation in April 2014. The arbitration ordered to revise the position in the contract between Naftogaz and Gazprom on the take or pay principle, lifted the ban on re-export of gas by Ukraine. Naftogaz is entitled to a compensation for overpayment for gas in Q4 2014 and 2015. At the same time, Gazprom will be able to receive an additional payment for gas supplies in Q2 2014.