Ukraine Prepares to Challenge Russian Gazprom in International Arbitration Court

Kyiv, May 30, 2014. Despite the Ukrainian government being prepared to pay its bills for Russian gas, the Eastern European country has anticipated that the Russian Federation would further escalate the energy conflict and that it may eventually stall gas supplies to Ukraine.  Prime Minister Arseniy Yatseniuk has provided evidence of Russia stealing gas and infrastructure objects from Ukraine. While the country strives for tripartite gas negotiations with Russia (with the EU as mediator), the Ukrainian Prime Minister stated that Ukraine and the EU would either succeed in the talks, or resort to the Stockholm Arbitration Court.

“We don’t trust [Russia’s] words, we trust actions. Starting with the annexation of Crimea, I tend to seriously doubt that Russia wants to reach a compromise,” said Yatseniuk. According to him, even if the Ukrainian side paid the gas bill for the first quarter of the current year, Russia would still do its best to halt gas supplies. He also called the new price Gazprom voiced for Ukraine ‘political’, since Russia increased the price two-fold in response to the appointment of the interim government in Ukraine.

To date Russia has stolen 2.2 billion cubic meters of gas in Crimea, following its illegal annexation of the Ukrainian peninsula.  Russia also seized Ukrainian platforms worth USD 1 billion and Chornomornaftogas [a state owned oil and gas company], which is valued at tens of billions of dollars, stressed Yatseniuk at the 2nd Energy Security Summit in Berlin on May 28, 2014.

Ukraine, a member of the Energy Community, urged the EU to develop a unified energy policy in order to stop anyone from using the energy issue as leverage and “a weapon”. Ukraine offered the EU and the U.S. a proposal to partner in operating, and thus modernizing, the Ukrainian gas transportation system. “We are ready to grant access to Ukrainian GTS and gas storage facilities to the Russians as well, as it is our international obligation under the Energy Charter Treaty and the Energy Community Treaty,” explained Yatseniuk.

“The common task of Ukraine and the EU is to preserve peace and stability, enhance energy independence of both Europe and Ukraine and have a level playing field with Russia,” stated Yatseniuk.

Notably, in only three months of its operation, Ukraine’s interim government boasts a number of achievements in energy security. Recently, Ukraine has secured reverse gas supplies from Europe, while cutting down on Russian imports three-fold. Also, Ukraine became the first non-EU country to join the system of transparent data display AGSI+.