A dispute over payments between Russian gas company Gazprom and Ukrainian pipeline operator Naftogaz has deepened, potentially putting at risk one of the few gas pipelines from Russia to Europe still in operation.
The dispute concerns transit fees for gas carried across Ukrainian territory to central Europe. In the wake of the latest exchanges between the two companies, wholesale gas prices in Europe rose Wednesday.
In a statement Wednesday, Gazprom said it rejected all legal claims by Naftogaz, saying that “services that have not been provided by the Ukrainian party should not and will not be paid for.”
Gazprom said Naftogaz had refused to fulfill its transit obligations.
It also said the agreement from 2019 stipulated that all disputes should be settled in Zurich, Switzerland — but because of anti-Russian sanctions, “Gazprom has been deprived of its fundamental right to a fair and impartial hearing.”
Gazprom said it considered the claims by Naftogaz as an “unfriendly step in continuation of the Ukrainian company’s bad faith behavior,” which may lead the Russian state to impose sanctions on Naftogaz. “In practice, this will mean a ban restricting Gazprom from fulfilling its obligations to the sanctioned entities.”
The CEO of Naftogaz, Yuriy Vitrenko, retorted on Twitter: “Gazprom’s statement is another example of Gazprom’s disregard for the rule of law and its association with the Russian Federation’s war of aggression against Ukraine.”
Vitrenko said “Naftogaz has invoked Force Majeure in respect of transit through entry point Sokhanovka because it is controlled by Russian armed forces, and instead offered transit through entry point Sudzha at no additional cost.”
“Gazprom has accepted the right of Naftogaz to refer disputes to arbitration. When Naftogaz exercises this right, it is simply a regular exercise of a contractual right, and not an “unfriendly act.”