Gazprom Loses Arbitration, Cuts Off Gas to Ukraine

The Russian energy company Gazprom announced on Friday that it will terminate gas contracts with Ukraine after losing a court case, complicating relations with Ukraine, which is trying to secure heating through emergency measures, while the EU warns that escalation could threaten Europe’s supply of Russian gas.

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The arbitration court in Stockholm ruled on Wednesday that Gazprom must pay the Ukrainian company Naftogaz $2.56 billion for undelivered gas for transit.

However, contrary to expectations, Gazprom did not start deliveries on Thursday, forcing Kyiv to activate crisis measures to compensate for the gas shortage.

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Due to the shortage of this energy source from Russia, the government has closed kindergartens, schools, and universities until next week, switched power plants from gas to oil, and purchased additional quantities of gas from Poland.

Unreliable Supplier

Ukrainian President Petro Poroshenko stated that Gazprom has no right to terminate the contracts and expects them to remain in force. This move shows that the Russian energy giant is not a reliable supplier, he asserted.

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The threat that Europe will run out of gas comes at a time when the continent is experiencing record low temperatures, increasing demand for energy sources.

Gazprom’s Director Alexey Miller stated that the arbitration decision means that contracts with Ukraine are no longer commercially viable, leaving the company with no choice but to ask the court to annul them.

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“Gazprom immediately initiated the procedure for terminating the contracts with Naftogaz for the supply and transit of gas before the arbitration court in Stockholm,” Miller emphasized.