Naftogaz demands in Stockholm court revision of transit rate for Gazprom

2018/7/9 23:04:46

Analyst: “…given Naftogaz’s recent string of successes in its court battles with Gazprom, such an initiative could increase Naftogaz’s value in the mid-term. Meanwhile, now it’s more important for the Ukrainian company to secure Gazprom payments under the completed Stockholm litigation.

 


KYIV, July 9, 2018 - Naftogaz of Ukraine submitted to the Stockholm arbitration court a claim to revise its transit contract with Gazprom (GAZP RX) as of March 2018, Concorde Capital informed its clients today based on a company report on July 6. Naftogaz submitted its request to revise its transit charge against Gazprom in March 2018, referring to “significant changes in the European gas market” after the contract was concluded in January 2009, and “the fact that the tariff level does not correspond to the European level.” Gazprom “has not been constructive in the negotiations, compelling Naftogaz to refer the matter to arbitration as provided for in the contract,” the company commented. Naftogaz estimates the value of its claim at USD 11.58 bln (which is the difference between new transit tariff - calculated based on contract with Gazprom - and the existing one, multiplied by the expected amount of gas transit from March 2018 to end-2019 as stipulated by the contract, or about 207 bcm).

 

 Recall, the previous litigation between Naftogaz and Gazprom in Stockholm arbitration court led to net gain of Naftogaz in the amount of USD 2.56 bln. While those rulings denied Naftogaz the ability to revise gas transit rates for Gazprom retrospectively, Naftogaz reportedly gained the right to review rates for the future.

 

Concorde analyst Alexander Paraschiy added: “The new litigation will likely continue for a couple of years, thus having no tangible effect on Naftogaz fundamentals in the short term. At the same time, given Naftogaz’s recent string of successes in its court battles with Gazprom, such an initiative could increase Naftogaz’s value in the mid-term. Meanwhile, now it’s more important for the Ukrainian company to secure Gazprom payments under the completed Stockholm litigation.

 

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For more information, link here: www.concorde.ua 

 

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