Judicial prospects for Gazprom due to reduced supplies to Europe

Alexey Belogoryev, Deputy Principal Director on Energy Studies of the Institute for Energy and Finance, commented to Svobodnaya Pressa, why German companies did not recognize Gazprom's force majeure to reduce fuel supplies to Europe.

Earlier, Reuters reported that two companies from Germany received a letter from Gazprom about force majeure under a gas contract, with which the Russian concern explains interruptions in the supply of hydrocarbons. However, the main importer of Russian gas in Germany, Uniper, considered the supplier's explanations unfounded and rejected them.

“In all cases, Gazprom cites exactly this argument - the delay of the turbines by Canada, which coincided with the need to put into operation more turbines, due to technical problems,” the source of Svobodnaya Pressa points out.

As the Deputy Director of the Institute for Energy and Finance emphasizes, Uniper and BP bought Russian gas and then resold it to end consumers. And therefore, in the event of a reduction, or, moreover, a complete cessation of supplies, energy companies find themselves in a difficult situation: “The same Uniper will have to buy“ blue fuel ”on the spot, but four times more expensive than under the contract. Therefore, it will be forced to spend an additional 20-30 billion euros on purchases. This is a very big loss for the company. And for one company, and there are many similar companies. Accordingly, being in a vulnerable position, companies will require Gazprom to comply with the contract.”

If Gazprom does not restore supplies, the prospect for the Russian concern is the Stockholm Arbitration, the economist is convinced:

“In court, it will be necessary to substantiate with all the evidence that the reduction in supplies via Nord Stream is indeed due to circumstances beyond its control. It will be necessary to prove that Gazprom did not have the opportunity to redirect supplies through other channels. After all, there is Yamal-Europe, through which Russia itself refused to supply gas. There is also Ukrainian transit, which is not subject to sanctions, through which Gazprom now supplies about 40 million cubic meters per day, instead of a possible 110.”

That is, the problem could have been partially solved, but Gazprom did not do this, Alexey Belogoryev emphasizes.

“Therefore, Gazprom's judicial outlook looks rather negative,” he sums up.