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Russian Federation refuses to resume gas supplies to Ukraine


The crisis comes a day after Russian President Vladimir Putin gave an annual state of the nation speech where he showcased a raft of new space-age weapons created to negate U.S. defence capabilities, threatening a new Cold War.

"We have started the procedure of terminating contracts with Ukraine's Naftogaz", Medvedev said. The announcement followed the verdict of the Stockholm Arbitration Court which heard the dispute.

"Earlier, the same tribunal agreed with Naftogaz's reasoning that the fall in gas demand and Naftogaz's failure to fulfil its gas offtake commitments had been caused by a sharp decline in the Ukrainian economy. We are categorically against Ukraine's economic problems being solved at our expense", Miller said.

Olena Zerkal stresses that Kiev wants to convene trilateral negotiations in format Ukraine - EU - Russia to ensure the stability of gas supplies to Ukraine and the EU.

On Wednesday, Stockton Arbitration ordered Gazprom to pay 2.56 billion Dollars under the transit contract with Naftogaz Ukraine, but the company disagreed with the court decision and announced its intention to "protect its rights in line with the legislation it adopted".

The decision coincided with freezing temperatures all over Ukraine, and the government called on Friday for measures to reduce consumption. He lambasted the decision, saying that the contract with Ukraine was no longer commercially viable and should be cancelled.

"The money should be spent on increasing gas production in Ukraine and on investment in improved energy efficiency at the level of consumers in Ukraine".

In the past, rows over the gas prices between Russia and Ukraine resulted in suspension of Russian gas exports to Europe, notably in the winters of 2005-2006 and 2008-2009. The Russian side has returned the funds to Naftogaz in full.




"Technically, Gazprom has been obliged to pay this sum since yesterday evening". Transit of Russian gas jumped by nearly 14 percent to 93.5 bcm via Ukraine. Former president Viktor Yanukovych eventually jailed Tymoshenko for doing the deal, to the outrage of Europe that made her release a condition of Ukraine's Association Agreement deal that Yanukovych was then negotiating.

Naftogaz CEO Andriy Kobolyev is pleased with the "expected" victory, "on major accounts", saying February 28 was an important day for Ukrainians and for the future of European gas markets. Work on the pipeline has been going well and the expansion is scheduled to be ready sometime later this year. "This will improve security of supply and give Ukrainians affordable energy". However, since 2012, Naftogaz failed to fully intake the contracted volume. Kyiv has not bought any Russian gas at all since November 2015, replacing it with reverse-supplied Russian gas from Europe. At the same time, the "take or pay" condition was preserved for 80% of this volume.

Due to an emergency gas shortage, Ukraine's power plants must now use oil instead of gas.

President Petro Poroshenko has stated that Ukraine has sufficient natural gas reserves in its underground storage facilities.

Naftogaz also said on Saturday that gas transit to Europe "remains intact".

Gazprom is unhappy with the ruling, which requires it to pay Naftogaz $2.56 billion in net damages for underpayments and under-deliveries under the 10-year contract that runs to end-2019.

Gazprom, obviously, will challenge the arbitration award.

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