Ukraine Goes after Gazprom’s Assets in Europe

Ukraine’s national gas company Naftogaz said on Wednesday it had initiated the enforcement of a $2.6 billion damages claim awarded by the Stockholm arbitration court in a long-standing case against Russia’s gas giant Gazprom.

According to the Financial Times, the Ukrainian company announced that the process of enforcing the damages recovery would begin against Gazprom in European countries within the framework of the arbitration proceedings enforcement, which stipulates freezing the company’s property in Europe, particularly the shares of two companies managing Gazprom’s Nord Stream Nord Stream 2 pipeline projects.

Gazprom said it is aware of Naftogaz’s intention to take action, but it had not received any formal notices. A Nord Stream 2 AG representative told Kommersant that the company had received notification about the recovery enforcement procedure in May, adding that it is not going to affect the gas pipeline’s construction.

Ukrainian President Petro Poroshenko said on Facebook that he ordered Naftogaz to expand its efforts to other European countries in an effort to recoup the award from Gazprom.

“The process of the enforcement of recovery of $2.6 billion from Gazprom has been moved to practice,” he said, adding that he had held a meeting with Naftogaz CEO Andriy Kobolev. “My clear order is that we must not stop in these three countries and do our best to ensure the arrival of awarded funds to Ukraine.”

Poroshenko said the assets Naftogaz would seek to acquire would include shares in the Nord Stream and Nord Stream 2 natural-gas pipelines.

According to Stanislav Mitrakhovich, an expert from Russia’s National Energy Security Fund, Naftogaz has chances to make Gazprom pay out over $2 billion.

“It is realistic after Gazprom undergoes the procedure of challenging the Stockholm Arbitration judgment. The Russian company will pay, but using money and in a civilized manner, not through exemption of assets such as Nord Stream 2,” he told Nezavisimaya Gazeta.