Gazprom in litigation with international energy partners over gas prices

© Benoit Tessier
Five gas companies in Europe and Turkey have filed for arbitration against Russian energy major Gazprom, urging a review of the contracted prices for Russian gas supplies.

According to Gazprom’s first quarter report, the companies are Danish DONG Energy, Polish PGNiG, Turkish Botas, Dutch Gas Terra, and London-based Shell Energy Europe.

For a long time Gazprom's partners have been seeking to reduce the cost of Russian gas, claiming prices on European spot markets are lower than the oil-indexed prices that are used in long-term contracts.

Arbitration proceedings against the Russian gas monopoly are at different stages.

PGNiG filed a claim in February in Stockholm’s Arbitration Court. The Polish company demands to change the price terms of the long-term gas supply contract signed between PGNiG and Gazprom in 1996. The decision is expected by July 31, 2017.

Turkey’s state-owned Botas has filed a case for international arbitration to seek a gas price discount, which it didn’t receive last year due to the failure of the negotiations over the Turkish Stream gas pipeline.

READ MORE: Gazprom: No reason for gas price war in Europe

In 2014, Gazprom and Botas reached an agreement on a 10.25 percent discount, but the deal was never signed. The rebate was part of the intergovernmental agreement on the construction of the Turkish Stream gas pipeline project to supply Turkey and Southern Europe with Russian gas.

Dutch company Gas Terra initiated court proceedings against Gazprom Export on May 4, 2016.

The arbitration tribunal has been already formed in the case of Shell Energy Europe. The hearings are expected to be held in February 2018.