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What the Stockholm gas ruling meant for Kyiv
Summary
A look back at the arbitration award that Naftogaz won against Gazprom, announced in the final days of February 2018.
What did Naftogaz actually win from Gazprom, and why did it matter? On 1 March 2018, the day after the ruling was reported, the question was already central to Ukraine's energy debate.
On 28 February 2018, the Stockholm arbitration upheld Naftogaz's claims for compensation over gas that Gazprom failed to deliver for transit. Naftogaz secured 4.63 billion dollars for the shortfall in agreed volumes. Across the two arbitration proceedings in Stockholm, Gazprom was required to pay Naftogaz a net 2.56 billion dollars.
The two figures describe different things: the first is the compensation awarded for undelivered transit volumes, the second is the sum Gazprom owed after both proceedings were settled. Read together, they show a ruling that went substantially in Naftogaz's favour.
The gas decision came days after another large commercial deal. On 23 February 2018, Ukrzaliznytsia and the American corporation General Electric signed a seven-year contract worth a billion dollars for the supply of locomotives and diesel locomotives.
The two stories were separate, but both involved large state-linked companies and sums in the billions of dollars at the turn of February and March 2018.
