Naftogaz of Ukraine has not been buying natural gas from Russia’s Gazprom for 1,000 days. Since Nov. 26, 2015, the country has been instead importing gas from the West.
Inconsistent prices were behind Ukraine’s refusal to buy gas on its eastern border at the end of 2015. Late in December 2017, the Arbitration Institute of the Stockholm Chamber of Commerce revised the contract between Naftogaz and Gazprom. The arbitration decision ruled that the price of gas for Naftogaz must be equal to the price of gas in the hub in Germany, whereas previously it depended on the price of gas oil and fuel oil.
However, just two months later on March 1, 2018, Gazprom violated the Stockholm Arbitration ruling, refusing to resume gas supplies to Ukraine. Instead, it returned Naftogas the $127.624 million the Ukrainian company had paid in advance.
Naftogaz is now seekeing compensation from Gazprom. The company says that Russia’s failure to deliver the agreed upon gas imports in March resulted in Ukraine overpaying by 30 percent for an emergency gas purchase from Europe. Gazprom’s actions also forced Naftogaz to abide by a Stockholm arbitration ruling under which it should buy minimum annual volumes of contracted gas from Gazprom.
