Gazprom to demand more than $8bn from Ukraine in ‘take-or-pay’ contract penalties, total gas debt almost $29.5 billion.

Gazprom to demand more than $8bn from Ukraine in ‘take-or-pay’ contract penalties, total gas debt almost $29.5 billion.(RT).

Russia’s Gazprom wants Ukraine’s Naftogaz to pay penalties for taking less than the agreed upon amount of gas in 2014, considering the so-called “take-or-pay” contract signed by the companies.
Gazprom would require Naftogaz of Ukraine to pay $8.197 billion in “take-or-pay” contract penalties, said company head Aleksey Miller at the European Business Congress on Thursday.

Russian natural gas producer also put Ukraine's total gas debt at almost $29.5 billion.

At the end of 2014 Russia, Ukraine and the EU agreed to put a freeze on the “take-or-pay” principle for five months which means that in the period spanning 1 November 2014 to 31 March 2015, Russia would not impose fines on Ukraine.

However, Gazprom has every right under the contract to fine Naftogaz for failing to provide payments from January 1 to October 31, 2014; there was no such freeze for the period of time spanning January 1 to October 31, 2014.

Naftogaz has reacted by saying it has never paid penalties arising from the “take-or-pay” rule and does not intend to do it in the future. The Ukrainian company claims the “take or pay” condition is not part of the contract.


At the same time the company welcomes the intention of Gazprom to submit their claims to an arbitration court. “Arbitration is the most civilized way to resolve commercial disputes when the parties cannot find a consensus through negotiations,” said the head of Naftogaz Andrei Kobolev, commenting on the statement of his Russian counterpart Aleksey Miller.

 “The corresponding claim will be addressed to Naftogaz of Ukraine today, the same claim will be directed to the Stockholm arbitration,” said Miller, quoted by RIA.

Miller estimated the total debt of Naftogaz to Gazprom at more than $29 billion. He said $200 million are owed to Gazprom for gas deliveries to the Donetsk and the Lugansk regions in Eastern Ukraine.

Earlier Gazprom filed an action to the Stockholm arbitration against Naftogaz, demanding $18.5 billion for the gas volumes in 2012-2013 that weren’t delivered by Gazprom but had to be paid for by Ukraine under the “take-or-pay” agreement. Hmmm.....Come Winter Ukraine will have No Gas reserves and no money.....get ready for war.