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Gazprom does not rule out gas transit through Ukraine after 2019 under certain conditions

Gazprom Deputy CEO Alexander Medvedev stressed that the contract will not be renewed under any circumstances

BERLIN, April 24. /TASS/. The contract with Ukraine after 2019 will not be extended, but this does not mean that the transit of gas will be stopped, Gazprom Deputy CEO Alexander Medvedev said on Tuesday.

"It will not be extended (after the year 2019). But this statement does not mean that there will be no transit," Medvedev said at a press conference in Berlin.

According to him, Gazprom expects Ukraine to come up with proposals for gas transit after 2019, in particular with regard to economic conditions of transit.

"So far no talks are being conducted, only consultations. The talks may result not only in volume of transit, but also the conditions of this transit. Ukraine should make appropriate proposals," Medvedev said on Tuesday.

He stressed that the contract will not be renewed under any circumstances.

Last week Gazprom sent documents for termination of gas supply and transit contracts with Naftogaz of Ukraine to the Stockholm Arbitration Court, as the negotiations failed to produce results.

Gazprom CEO Alexei Miller told reporters that the company is ready to hold negotiations with Naftogaz of Ukraine on gas transit after the expiration of the current contract. But Ukraine should ground economic feasibility of the transit, he added. Miller also said that if Ukraine proves the economic feasibility of the new contract Gazprom may maintain the volume of gas transit via Ukraine at 10-15 bcm a year.

Gas dispute

The two companies plunged into a litigation over gas supplies and transit contracts since 2009 with the Arbitration Institute of the Stockholm Chamber of Commerce back in 2014.

Gazprom is demanding more than 37 billion U.S. dollars from the Ukrainian company for gas under the take-or-pay clause for 2012-2016, for the payment for gas supplied in May-June 2014 and gas debts.

In December 2017, the court ordered Naftogaz to pay Gazprom $2 bln for the deliveries, but reduced the annual contractual volume of purchases to 5 billion cubic meters. At the same time, the "take or pay" condition was preserved for 80% of this volume. This condition will be effective only in 2018.

As for the gas transit contract, in February 2018, the Stockholm court ruled that Gazprom’s obligation will remain (110 billion cubic meters per year). The Russian company should also pay $2.56 bln to Naftogaz for the shortfall in transit volumes.

In March, Gazprom returned Naftogaz prepayment for the March deliveries and notified the Ukrainian company that it was going to start the procedure of termination of contracts. This procedure can take 1.5-2 years.

Gazprom CEO Alexei Miller noted that, guided by double standards, the Stockholm court took asymmetric decisions, which significantly violated the balance of interests of the parties under the agreements.