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Alexander Khurshudov: Gazprom has got an excellent chance to terminate the one-sided contracts with Europe

Alexander Khurshudov, expert Oil and Gas Information Agency
March 04, 2018/ 15:23

This not a joke, not blackmailing, but the harsh reality. Gazprom really has this opportunity and it would be a shame to miss it. 

Everybody can see that the Stockholm Arbitrary Court found a creative approach to the take-or-pay principle. First, they denied applying it Naftogaz as being “non-market”. I’ll note in parentheses here that once it’s in writing it’s permanent and the Arbitrary may stick their moral judgment where the sun doesn’t shine. However, Naftogaz avoided the INDISPUTABLE penalty of $35 bln.

Then the Arbitrary felt sudden inclination to the hated principle and gave Gazprom $4.6 bln fine for having provided less gas for pumping. The principle turned into “pump-or-pay” for the very gas that the customer had rejected without paying for. What a piggishness!

I have already mentioned that it’s better not to deal with the European swindlers at all. First they make long-term contracts and then appeal to their “friendly” courts in search of price decrease and other benefits. However, Gazprom has a chance to terminate the one-sided contracts with Europe. Russia can refuse to recognize the Stockholm Arbitrary as the arbitrator for the gas contracts.

These are force majeure circumstances. The Arbitrary turned out to be incompetent, which is clear to anyone. They can’t pass judgment upon our contracts. Therefore, the contracts must be suspended until the new legal body to solve disputes is defined.

Obviously there will be lots of angry complains, but they won’t mean a thing. We need to set the deadline (3-6 months) and terminate gas shipments on its expiry. Actually, this is what has been done to the Ukraine. We need to go further in this direction and apply the same strategy to all the EU countries with no exception. 

Since the swindlers are accustomed to dealing with their courts, the European bureaucrats will try to stretch the time hoping that the problems will go away. This is exactly what we count at. This will give Gazprom the chance to terminate the long-term contracts and get rid of the obnoxious partners.

An opponent may object that Gazprom will also lose money stopping regular shipments. I don’t think so. After the contracts’ termination gas prices in the EU will vary from $500 to $600 for a thousand cubic meters. So trading in separate batches Gazprom will not only benefit, but also compensate for the previously encountered losses.            


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