Gas dispute between Russia and Ukraine continues to flame

The Stockholm arbitration court ruled last week (Feb. 28) on gas transit fees as part of the Gazprom–Naftogaz dispute. The court said Gazprom should pay Naftogaz $4.56 billion in lost transit fees. The court also found that the contract obliges Gazprom to pay transit fees for the expected 110 billion cubic metres of gas to be transmitted via Ukrainian pipelines through to the end of 2019.

In the arbitration court's ruling in December 2017 on gas supplies to Ukraine, Naftogaz was ordered to pay Gazprom $2 billion for its unpaid gas bills. Naftogaz's take-or-pay purchases were limited to 5 billion cubic metres per year in the 2018–2019 contract period. In practice, Ukraine has not imported any gas from Russia since 2015. Following the decision, the companies agreed to resume gas deliveries in early March.

Gazprom, however, rejected last week's arbitration court decision, noting it would not abide by the transit or take-or-pay findings. Consequently, Gazprom also rejected the agreement on resuming gas supplies to Ukraine, forcing Naftogaz to cover its gas needs with imports from Poland and elsewhere. If negotiations continue to drag on, it is possible that the matter will not be resolved before the current contract term expires at the end of 2019.