Yet another gas pipeline to Europe – one of the last that is still online, just to be clear – faces closure due to an ongoing legal spat between Russia and Ukraine.
Reports indicate that the Russia state-owned gas giant Gazprom PJSC has rejected all claims from Ukraine’s energy firm Naftogaz concerning arbitration proceedings over the transit of Russian gas.
Gazprom notified the arbitration court about its rejections, as well as announced that sanctions may have to be imposed against Naftogaz if it attempts to pursue the arbitration case any further.
Should these sanctions become a reality, Gazprom would be prohibited from paying Ukraine any further transit fees – meaning no more gas for Europe. (Related: Russia’s Nord Stream 1 [NS1] is offline indefinitely, and Nord Stream 2 [NS2] was just blown up, rendering it useless.)
Earlier this month, Naftogaz initiated a new arbitration proceeding against Gazprom, claiming the Russian energy company failed to pay for the rendered service of gas transportation through Ukraine.
According to Naftogaz, “funds were not paid by Gazprom, neither on time nor in full.”
In response, Gazprom said that Naftogaz has no “appropriate reasons” to reject its obligations on transit via the Sokhranovka point, a key route through which Russia exports gas to Europe.
Back in May, Ukraine suspended the flow of Russian gas through Sokhranovka, which delivers nearly one-third of the fuel that is piped from Russia to Europe straight through Ukraine.
Ukraine blamed Russia for the shutdown, indicating that the flows would be moved elsewhere. Immediately following the halt, gas prices skyrocketed by almost 20 percent as traders speculate that Europe will have to live without Russian gas both this winter and beyond.
“In practice, this will mean a ban on Gazprom from fulfilling obligations to sanctioned bodies under completed transactions, including financial transactions,” the company announced about the dispute.
According to some reports, it is not a matter of if the Naftogaz pipeline will be shut down, but rather when. In that event, the only pipeline left for Gazprom to send gas will be the TurkStream pipeline to Turkey, which covers Turkey and “a handful of European countries that haven’t severed business ties with Russia.”
“What’s the most outrageous of all this is the EU can click a mouse and reverse the sanctions on Russia, and un-freeze their billions that they stole,” one commenter expressed about the situation.
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