Russia: Ukrainian fine creates new risks for gas transit to EU

MOSCOW, Dec 12 (PRIME) -- Ukraine has illegally imposed a U.S. $6.8 billion fine on gas giant Gazprom creating risks for the transit of Russian natural gas to the E.U., Energy Minister Alexander Novak said on December 9 in letters sent to European Commission’s Vice President for Energy Union Maros Sefcovic and other E.U. ministers.

“I have given the letter to mister Sefcovic regarding the recent decision of the Kiev Economic Court against Gazprom in Ukraine. We express deep concern with the decision made on December 5…to impose the $6.6 billion fine,” Novak told reporters.

“We see this as an absolutely illegal decision as it was not made by the Stockholm Arbitration Court. This allows us to speak about new risks for the transit of gas to European consumers because the Ukrainian side may decide to recover the penalty, a corresponding fine.”

In 2015, Ukraine’s antimonopoly committee imposed an 85.9 billion hryvna, or $3.4 billion, fine on Gazprom to punish the company for its monopolist position on the gas transit market. Gazprom said it was baffled by the decision because it does not operate in Ukraine but concedes its gas to state energy holding Naftogaz Ukrainy on the border with Russia. Gazprom challenged the ruling, but all Ukrainian courts dismissed its complaints.

On October 31, the antimonopoly committee doubled the fine by including a penalty for non-payment. On December 5, the Kiev Economic Court obliged Gazprom to pay 171.8 billion hryvnas, or U.S. $6.8 billion in the fine.

“I have sent similar letters to ministers of countries that consume Russian gas and who receive it through Ukraine, and I have expressed a corresponding concern. We think that this is an unprecedented case that has only increased the risks for a smooth passing of the winter and for reliable provision of gas to European consumers,” Novak said.

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