Ukraine expects that the Stockholm Arbitration Institute will cancel the "take-or-pay" condition in the contract on the purchase of natural gas signed between national joint-stock company Naftogaz Ukrainy and OJSC Gazprom, Board Chairman Andriy Kobolev has said.
“We want to lift it [the condition]. In our case we have a strong argument for this. In 2013, Gazprom sold 12 billion cubic meters of gas to another intermediary [Dmytro Firtash’s Ostchem] on the Ukrainian market at the lower price… How could we speak about the “take-or-pay” principle for the Ukrainian market when Gazprom offers us one price on this market and the lower price for another dealer?” he said in an interview with Russian publication Vedomosti on Thursday, Aug. 7.
He said that even if the condition is retained, the minimum limit for the purchase of natural gas by Ukraine in the existing conditions should be considerably reduced.
“This volume should be less. The “take-or-pay” condition has sense only on the competitive markets where there are several gas suppliers. This principle protects suppliers from not ousting their volumes on the market by rivals. This is not the same with Ukraine. There were no other gas suppliers, but Gazprom, in the previous years. The fall in sales of Gazprom on the Ukrainian market was not because Ukraine replaced its gas by gas of other supplier, but because the price of Gazprom did not allow placing its volumes on the Ukrainian market,” Kobolev said.
“What the sense to buy the volume on the “”take-or-pay” condition which is impossible to sell? To burn it? It is impossible to export it as domestic consumers do not buy it and what to do with this gas? We as a dealer do not have other choice but not to take additional gas. This position is rather strong,” he added.
As reported, supplies of natural gas by Gazprom to Naftogaz Ukrainy came to 12.9 billion cubic meters in 2013, and Ostchem bought 12.9 billion cubic meters of gas. A total of 2.1 billion cubic meters of natural gas was imported from Europe.
