OREANDA-NEWS. Naftogaz of Ukraine has appealed to the Arbitration Institute of the Stockholm Chamber of Commerce (SCC) to adjust the company's gas transit contract with Russia's Gazprom. Certain provisions of the 2009 contract are in breach of Ukraine's legislation adopted after the country joined the Energy Community in 2010. The accession protocol requires Ukraine to implement the provisions of the Third Energy Package by January 1, 2015.

Requesting a review of this matter in the SCC, Naftogaz aims to prevent any potential disruptions of Russian gas transit through Ukraine related to discrepancies between national legislation and the provisions of the contract.

"We fully realise the importance of stable gas transit through Ukraine for the EU," said Andriy Kobolyev, CEO of Naftogaz. "To make our relations with Gazprom as transparent and predictable as possible, we call for the adoption of standard European gas market agreements. In the current situation, applying for a resolution by an international court is a practical and secure way to settle the dispute in a civilised manner."

Naftogaz has repeatedly appealed to Gazprom explaining the necessity of putting the contract in line with Ukraine's international obligations and updated national legislation. Despite numerous requests, the issue has not been addressed so far.

The required changes include, among others, the substitution of Naftogaz (a gas trading and holding company) with Ukrtransgaz (Ukraine's transmission system operator) as a party of the transit contract. In addition, the SCC will review the issue of adopting a standard tariff setting methodology used by European transmission system operators. Naftogaz is also seeking compensation for shortfalls in gas transit volumes since 2009. During the past five years, Gazprom transited an average of 94 bcm of gas annually instead of the 110-112 bcm per year stipulated by the contract.