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Gazprom reserves almost $5 billion to pay fine to Naftogaz

Gazprom reserves almost $5 billion to pay fine to Naftogaz

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The Russian gas monopolist Gazprom has reserved the entire amount of a $4.63 billion fine on the transit agreement with Naftogaz. The corporation published a report prepared in accordance with Russian Accounting Standards, where the section “fines, penalties for violation of the terms of agreements” in Gazprom’s balance sheet states an expense amounting to RUR 272.943 billion ($4.74 billion), RBK has informed, UNIAN reports.

This amount is almost identical to the ruling made by the Stockhold Court of Arbitration, which ruled the Russian corporation to pay the Ukrainian party $2.58 billion (with penalties). The court also ordered Gazprom to supply up to 5 billion cubic meters of gas annually in 2018 and 2019 at prices corresponding to those in European gas hubs.
As the result of this, Gazprom announced its plans to request the court to terminate the agreements on gas transit and supply to Ukraine, and also cut the pressure at the entrance to Ukraine’s gas transmission system, which made the transit of gas to Europe more complex and caused a temporary gas shortage in the nation (on 2-3 March). After the “gas crisis” outbreak was successfully solved, the European Commission claimed that Ukraine had fulfilled all of its obligations for transit gas supplies.

On 20 March, Gazprom officially notified the Russian company that it refused to comply with the arbitration ruling. Gazprom effectively refused to supply gas to Ukraine and pay the Ukrainian side $2.58 billion. According to Naftogaz, the Ukrainian company rejected Gazprom's proposals to terminate existing contracts. The next round of negotiations between the companies is scheduled for April 2018.
 
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