Ukraine informs EU about use of early warning mechanism in energy sector due to Gazprom's actions – MFA

Deputy Minister of Foreign Affairs of Ukraine for European Integration Olena Zerkal says Ukraine has sent notification to the European Union on the use of an early warning mechanism in the energy sector to ensure transit of natural gas to Ukraine and the EU due to lowered gas pressure at the entry point to the Ukrainian gas transmission system (GTS) from Russia.

"Gazprom's current actions related to its failure to fulfill contractual obligations and its refusal to implement the decisions by the Stockholm Arbitration pose a threat to gas supplies to Ukraine and the EU," Zerkal wrote on Facebook on March 1.

Read alsoRussia's Gazprom faces $500,000 in daily fine until it pays $2.56 bln to Naftogaz"Gazprom has once again demonstrated its dishonesty. And, as always, it is trying to put the blame on Ukraine... It won't work!" she added.

"We have just sent notification to the EU on the use of an early warning mechanism in the energy sector under Article 340 and Annex 26 of the Association Agreement. We are also initiating trilateral negotiations in the Ukraine-EU-Russia format to ensure stable gas supplies to Ukraine and the EU," Zerkal wrote.

"The story of 2009 won't happen again, the Stockholm [decision], the Association Agreement and the gas market reform have completely changed the paradigm of relations with Russia in the gas sector. Blackmail no longer works," the official added.

As UNIAN reported earlier, Ukraine, represented by NJSC Naftogaz of Ukraine, sued Gazprom in a Stockholm arbitration court over the two contracts of 2009: on transit shipments of Russian gas to the European Union and purchases by Ukraine of Russian gas.

On December 22, Naftogaz received the final award of the Arbitration Institute of the Stockholm Chamber of Commerce related to the contract for purchases by Ukraine of Russian natural gas. Thus, the court satisfied a number of demands of the Ukrainian side, including a reduction in the gas purchase price in the second quarter of 2014 to $352 per 1,000 cubic meters. It also rejected Russia's Gazprom take-or-pay claims amounting to $56 billion. As not all the demands of the Ukrainian side were satisfied, Naftogaz was left owing Gazprom some $2 billion.

Read alsoPoroshenko: Naftogaz should work toward court seizure of Gazprom's assets if debt not paidThe second ruling concerned the contract for transit shipments of Russian gas via Ukraine, which was signed in 2009. According to the deal, Gazprom was to transport 110 billion cubic meters of gas per year via Ukraine. Since the condition had not been met, Naftogaz demanded that the court recover $16 billion in compensation from the Russian company in this litigation.

On February 28, Naftogaz received the final decision of the Stockholm Arbitration Tribunal ordering that Gazprom should pay Naftogaz $4.63 billion. The award means Gazprom has to make payments to Naftogaz in the order of $2.56 billion after residual payments for gas delivered in 2014 and 2015 have been settled.

After seeing the court's decision, on the morning of March 1, Gazprom refused to supply gas to Ukraine in March 2018. At the same time, the Russian company has already received an advance payment from Ukraine. Naftogaz has called such behavior by Gazprom a violation of the Stockholm Arbitration award.

Moreover, according to Ukrtransgaz, Ukraine's state-owned gas transmission system (GTS) operator, there has not been a single day that Gazprom observed a contractual demand to maintain the necessary level of gas pressure at the entry point to the Ukrainian GTS.