Russia: ‘Illegal’ Ukrainian fining of Gazprom puts EU consumers at risk

Alexander Novak, with Maroš Šefčovič [R] [European Commission]

Russian energy Minister Alexander Novak has called a $6.6 billion fine imposed by a court in Ukraine on his country’s gas export monopolist Gazprom illegal, and warned of “new risks for European consumers”.

Novak spoke to the press following trilateral talks in Brussels, mediated by Vice-President for Energy Union Maroš Šefčovič, aimed at agreeing a third consecutive ‘Winter Package’.

The European Union is eager to mediate between Kyiv and Moscow, because in 2009, when Gazprom stopped deliveries to Kyiv, the country used gas destined for Europe for its own domestic consumption, and left several EU countries in the cold.

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Earlier this week, Kyiv’s Economic Court sanctioned a move by Ukraine’s anti-monopoly committee to fine Gazprom $6.6 billion, on the grounds that the Russian company had abused its monopoly position in the natural gas market, between 2009 and 2015.

“In our view, it is an absolutely illegal decision, as it was not implemented by the Stockholm court,” Novak told the press.

The International Court of Arbitration in Stockholm is tasked with settling problems involving international business deals.

According to Novak, the Kiev court ruling poses “new risks for gas transit to European customers since Ukraine can adopt the [decree on] imposition of penalties corresponding to the fine”.

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Regarding the trilateral talks, Novak said that this time there were no divergences on pricing, as the gas price proposed by Russia is, in his view, competitive and lower than on spot markets.

According to a Russian energy ministry press release, Ukraine wants to buy between 1.5 and 4 billion cubic meters of Russian gas during the current winter to secure its own needs, and also the transit of gas to Europe.

A Commission press release says that there is a “full commitment to work closely together to ensure gas flows from Russia to Ukraine and gas transit to the EU”. In this respect, it has been agreed that discussions will continue at all levels.

Šefčovič said after the meeting that the trilateral format had again proven its usefulness.

“Facilitated by the Commission, substantial progress on gas sale and purchase has been made, but some work still remains to be done. Parties were close to concluding today and will now need to discuss the format of the agreement,” he stated.

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