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Ukraine's Naftogaz takes $2.6 billion legal dispute with Gazprom to US

  • Author
  • Stuart Elliott    Alexander Bor
  • Editor
  • Maurice Geller
  • Commodity
  • Natural Gas

Kiev — Ukraine's state-owned Naftogaz Ukrayiny has taken to its legal battle with Gazprom to the US in a bid to force the Russian gas giant to pay a net $2.6 billion awarded earlier this year by a European arbitration court.

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State-owned firm files lawsuits in New York, Texas

Targets Gazprom's US-based subsidiary

Follows Naftogaz's February arbitration victory

Gazprom has refused to pay the award -- which came following rulings on Russian natural gas supply and transit by an arbitration court in Stockholm in February -- as it has filed appeals against both decisions.

It is the latest twist in the long-running dispute between the two companies over their 10-year gas supply and transit agreement that began in 2014, one which again could see tensions raised between the two sides -- both crucial for the supply of Russian gas to Europe.

Naftogaz is looking to seize Gazprom assets around the world in order to force the Russian company to pay up.

"Gazprom continues defiantly not to implement the ruling of the international arbitration," Yuriy Vitrenko, the commercial director of Naftogaz, said in a Facebook post late Wednesday.

"There are no legal grounds for Gazprom not to pay," Vitrenko said.

Naftogaz has filed lawsuits against Gazprom in two US courts, one in New York and one in Texas, Vitrenko said.

"The court in New York has agreed with our demands against Gazprom," Vitrenko said. "We're still waiting for the ruling by the court in Texas."

An industry source said earlier Wednesday that Naftogaz was pursuing Gazprom Marketing & Trading USA, the Texas-based subsidiary of the Russian company, at the US District Court for the Southern District of Texas.

Gazprom could not be reached for comment Thursday, but has previously said it would use all legal means at its disposal to fight Naftogaz's claims.

Naftogaz has also applied to courts in the Netherlands, Switzerland and the UK to enforce the arbitration award.

The Stockholm arbitration court ruled at the end of February that Gazprom should pay Naftogaz $4.6 billion in damages for not transiting the agreed volumes of Russian gas to Europe under the parties' 2009 transit accord.

Taking into account Gazprom's earlier $2 billion win in the arbitration ruling on Russian gas supply to Ukraine, Naftogaz is owed a net $2.6 billion by Gazprom.

--Stuart Elliott,

--Alexander Bor,

--Edited by Maurice Geller,