Russia's Gazprom officially informs Naftogaz about proceedings to terminate gas contracts

Russia's gas giant Gazprom has officially informed NJSC Naftogaz of Ukraine of the beginning of proceedings through the Arbitration Institute of the Stockholm Chamber of Commerce on the termination of gas contracts.

"NJSC Naftogaz of Ukraine has been officially notified of the commencement of the procedure through the Stockholm Arbitration for the termination of contracts for the supply and transit shipments of natural gas," CEO of Gazprom Alexei Miller told reporters in St. Petersburg, the Russian news agency RIA Novosti said.

Read alsoGas war: Naftogaz demands compensation from Gazprom for gas imported from EU amid brief energy crisisAs UNIAN reported, Russia's gas monopoly Gazprom lost litigation with NJSC Naftogaz of Ukraine in a Stockholm arbitration court, which ruled that Gazprom pay $2.56 billion to the Ukrainian company. At first, Gazprom agreed to supply 0.5 billion cubic meters of gas to Ukraine in March at the prices determined by the arbitration. However, it suddenly refused on March 1 to fulfill its contractual obligations and reduced the gas pressure at the entry point to Ukraine's gas transportation system (GTS) at the eastern border to a critical level.

Naftogaz says Gazprom's failure to fulfill the court's decision has led to a gas shortage in the GTS. To tackle the crisis, Ukraine's Cabinet of Ministers imposed restrictions on domestic gas consumption, while Naftogaz went for an emergency purchase of 60 million cubic meters of gas from Poland's PGNiG. According to Poroshenko, thanks to the efforts by Naftogaz and the Cabinet of Ministers, the country will complete the heating period without any emergencies. He also stressed that Gazprom would pay "every single penny" under the Stockholm Arbitration's award. Poroshenko assured that the situation with gas supplies had completely stabilized as of March 3.