Gazprom rejects the ruling of the arbitral tribunal in favor of Ukraine and does not execute the agreed supplies. Ukraine reaches for deliveries from Poland. Gazprom announces the termination of all contracts with Naftogaz. Is this a new gas war? Is the old Gazprom returning? Nevertheless, the Russians keep their actions in check, which may allow them to maintain credibility in the announced negotiations – says Wojciech Jakóbik, editor-in-chief of BiznesAlert.pl.
Gas supplies from Poland
After an unfavorable ruling of the arbitration court, Gazprom announced that it would not deliver gas to Ukraine in March. It is about contracts for gas supplies and transport signed with Naftogaz in 2009. Russian Gazprom has lost arbitrage on both contracts. On February 28, the Stockholm arbitration court ruled that Gazprom should pay Naftogaz $ 4,63 billion for the shortage of gas supplies under the existing transit agreement, which probably upset the Russian giant. Kiev has launched an early-warning system and announced that it could run out of gas. At the same time, it informed that Gazprom deliberately does not provide a level of supply guaranteeing the stability of the Ukrainian transmission system. The situation may be improved by supplies from the European Union, for example from Poland.
When the inhabitants of Europe were preparing for the next frosty weekend, in the afternoon Polish PGNiG announced that it had signed a contract for the supply of gas to Ukraine with Naftogaz. The volume is 60 million cubic meters for March, but Poles declare their willingness to offer more and for a longer period. It was a response to the difficult situation in which Ukraine found itself. The contract was announced a few hours after Gazprom’s assurances that only he is able to ensure the rapid supplies necessary for Ukraine.
– The current situation related to gas supplies proves that our decision to diversify sources of supply was right. Thanks to partners from Poland, another attempt by Moscow to use gas as a political weapon against Ukraine failed. I hope that the EU and the governments of the respective Member States will take this situation into account before making a final decision on Nord Stream 2 – commented Nafogaz CEO Andriy Kobolyev.
It is worth noting that deliveries from PGNiG take place under a commercial contract. It should be expected that their intervention nature has increased the price of the contract. Poles do not send gas for free, which is suggested by the first comments on the Russian-language Internet.
Gazprom threatens to break the agreements
It did not take long to wait for the reaction of the Russian Gazprom. Its president, Alexei Miller, pointed out that the arbitration award in Stockholm was argued „a difficult economic situation in Ukraine.” For this reason, the Russian company declared that it would not finance the improvement of the situation on the Dnieper and proceeds to „the procedure for terminating all agreements with Ukraine”. Attention should be paid to legal rhetoric in the Gazprom representative’s statement.
– Gazprom is forced to start a Stockholm-based arbitration procedure for the termination of contracts signed with Naftogaz for the supply and transit of gas – Miller said quoted by BiznesAlert.pl. This declaration suggests that despite dangerous comments, the Russians intend to act in the borders of law or beyond its borders in a difficult to prove way.
It would confirm my thesis from the text about the hybrid gas war in Ukraine. The Russians, taught by the bitter lesson of two gas wars, may be interested in maintaining credibility in the eyes of partners in the West. A new hot gas war in Ukraine would be a gift for the critics of the contested Nord Stream 2 project, which Russian gas is supposed to flow to disadvantage supplies through Ukraine after 2019. In my opinion, Gazprom tends to raise the rate before tripartite talks with Ukraine and the European Commission, which may include the topic of maintaining a minimum level of supplies through Ukraine, which in Gazprom’s view would be „solving Ukraine’s economic problems” at its expense.