Kiev turns focus back on Moscow for gas supplies

Kiev turns focus back on Moscow for gas supplies

Editorial Staff
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Ukrainian company Naftogaz is buying from Russia again after resorting to various European trading companies over the last three years

Buying supplies from Moscow rather than the European Union traders to which it has resorted in recent years is cheaper for Naftogaz. While legal battles generated by the dispute over take or pay contracts and transit rights through Ukrainian territory raged, Naftogaz turned to several trading companies, including Eni, Engie, Axpo, Rwe, Shell, and others, but it may now go back to basics. Kiev’s new stance is the result of a decision by the arbitration court of the Chamber of Commerce of Stockholm obliging the Ukrainan company to buy at least 5 billion cubic meters year from the Russians. "The upside of the decision taken by the arbitration court is that the price of procurement contracts under which Gazprom will have to supply gas to Ukraine - explained Naftogaz CEO Adroy Kobolyev - will be lower than what we are paying European suppliers". The arbitrators in fact established a retroactive price reduction of 27%, which will bring it down from 485 to 352 dollars per 100 cubic meters. The group will however be required to pay Gazprom the arrears on previous supplies, amounting to around 2 billion dollars as a result of the retroactive discount on prices decided by Stockholm.