Turkish companies started to prepare for litigation with Gazprom

“Gazprom” will have to answer in international arbitration for a reduction in supplies to Turkey, if importers fail to reach a mutually acceptable agreement with the Russian company, said informed sources, the Turkish newspaper Hürriyet Daily News.

“We want to resolve this matter in accordance with the contract with Gazprom, and, if possible, in the most positive way. If this is not possible, the place in which you will have to apply in this context, it is evident, that in international arbitration,” said one industry source.

The source added that claims be made by individual companies and on a class-action lawsuit. He said that the defendant will become “Gazprom export” — affiliated structure “Gazprom”.

“According to the contract, any dispute may be referred to arbitration if it cannot be resolved within six months. The point is, if Russia will go with Turkey as well as with the Ukrainian and Lithuanian markets, it may lose the Turkish market,” said the source.

Turkish company Enerco March 1, said that Gazprom unilaterally decided to raise the prices of gas supplied to the Turkish importers, and no official explanation has reduced the volume of deliveries, writes Hürriyet Daily News. As stated in the company statement referenced in the paper, the deliveries started to decline since February 24.

Enerco argues that the Russian side had violated the law. “All importers, including us, has agreed with “Gazprom export” the revision of gas prices in April 2015. Thus the contract price was reduced. It was permanent and not temporary revision. Therefore, none of the parties has no right to change or cancel these conditions without the approval of the other party. “Gazprom export” at the end of last year, asked about the revision of prices. Our contract allows this, but such proposals should be the subject of negotiations must be mutually agreed upon or as extreme measures submitted to arbitration. Our negotiations began in a positive manner,” the statement said Turkish companies. Enerco also stressed that it had no unpaid debts to “Gazprom export”.

In accordance with the contract 2013, the Turkish company annually imports 10 billion cubic meters of Russian gas, reminiscent of the Hürriyet Daily News. According to sources, when “Gazprom” has reduced deliveries in February, the two sides negotiated a discount of 10.25%, but recently, Russia unilaterally ceased to provide this discount, citing “differences over gas prices”.

On 25 February it became known about reduction of Russian gas supplies to Turkey via the Western route via Ukraine, Moldova, Romania and Bulgaria. According to the company “Bulgartransgaz”, February 24 in this area reached 40% less than this day a year ago.

At the end of January on the abolition of “Gazprom” discounts for a number of Turkish companies reported Anadolu news Agency citing its sources. Sources in “Gazprom export” said the discount is really cancelled, because it has lost the relevance due to the falling oil prices, but the negotiations on this issue continue.

In late February a source in “Gazprom export” has confirmed the reduction of gas supplies to Turkey. “We chose this method of negotiations. It’s not because of the weather,” he said. “Negotiations “Gazprom export” and an independent Turkish consumers continue in a constructive manner. The results of the negotiations will be announced according to their results. We are interested in maintaining stable contractual relations with our Turkish partners,” the source said .