Rada registers proposal to appeal to Stockholm arbitration court to cancel 2009 gas contracts with Russia
The Ukrainian parliament may instruct the country's Cabinet of Ministers to appeal to the Arbitration Institute of the Stockholm Chamber of Commerce concerning the cancellation of contracts between the national oil and gas company Naftogaz Ukrainy and the Russian gas giant Gazprom that were concluded in 2009.
The parliamentary Web site says the Verkhovna Rada registered a draft resolution on instructing the Cabinet of Ministers to appeal to the Arbitration Institute of the Stockholm Chamber of Commerce to annul the contracts, which were dated January 19, 2009. The resolution was drafted by independent MP Oleh Liashko, who is deputy chief of the Verkhovna Rada's finances and banking committee.
Gazprom earlier presented Naftogaz Ukrainy with a bill for about $7 billion for gas the Ukrainian company was to have bought in 2012. The view at the Ukrainian holding is that the company has in full measure paid for Russian gas per an earlier accounting. Naftogaz more than once notified the Russian gas giant of its intent to reduce natural gas purchases in 2012.
Ukraine cut natural gas imports 26.5% (by 11.864 billion cubic meters (bcm)) last year to 32.939 bcm. Almost all of that gas was delivered from Russia to Naftogaz Ukrainy and Dmytro Firtash's OstChem Holding, Ltd. (Cyprus).
Naftogaz Ukrainy imported 24.9 bcm of Russian gas under a contract with Gazprom last year and about 55 million cubic meters (mcm) under a reverse scheme contract with RWE of Germany.
Under an existing contract from January 19, 2009, Naftogaz is to buy 52 bcm of gas, with the least take-or-pay limit being 41.6 bcm. The contract also stipulates the reduction - on a mutually agreed basis - of the contracted volume of gas by a maximum of 20%, with agreement on this needing to be struck not later than six months before deliveries begin.
Naftogaz Ukrainy has negotiated with Gazprom over reducing the minimum amount of obligatory gas purchases to 27 bcm a year, but the parties have reached no agreement. This agreement no longer suits Ukraine, which has attempted unsuccessfully to get its pricing parameters revised. Accordingly, the Ukrainian state holding intends to buy less Russian gas because of its cost and in November began using its gas-transport facilities in reverse to bring in gas from Europe.
In 2010, Naftogaz received a discount of $100 per thousand cubic meters (nullifying the Russian export duty) in exchange for the extension of the Russian naval fleet's presence in Crimea.
Despite the discount, the price for Russian gas for Ukraine in 2011-2012 was the same as or higher than the cost for several European countries, although delivering fuel to Ukraine is significantly less costly.
Buying gas in Europe last year cost Naftogaz Ukrainy less than buying it from Russia did. The country's state statistics service's figures indicate that the average price for gas imported from Germany last November cost the company $425 per thousand cubic meters, where the price for Russian gas was around $430.
