Gazprom began slowing down its gas supplies to Europe, especially Germany, in June 2022. It finally halted them altogether at the end of August of that year.
The international arbitration court in Stockholm has granted German energy firm Uniper the right to demand more than €13 billion from Gazprom as compensation for the latter slashing gas deliveries over the past two years.
Following the start of the Russia-Ukraine conflict in February 2022, Gazprom cited “force majeure” in order to justify the gas delivery reductions and eventual complete halt by the Nord Stream pipelines.
A state of force majeure usually allows a company to be absolved of its current contractual duties, as well as from any resulting legal persecution. However, in order for it to be accepted, the event in question must be extremely unpredictable, without any possibility of bringing it under control.
Apart from Uniper, the force majeure notice has been issued to other European clients, including German energy company RWE Group.
In Uniper’s case, Gazprom has not revealed any more details about the reason for the company claiming force majeure, which caused Uniper to reject the notice. The resulting arbitration tribunal decision has now also given the German company the right to end its existing long-term gas supply contracts with Gazprom.
For Uniper, which was heavily dependent on Gazprom’s gas supplies, the reduction of supplies was a major shock, leaving it to scramble for other, much more expensive suppliers on the spot gas market, at very short notice.
This led to the company facing soaring losses for an extended period, pushing it close to the brink of insolvency.
Michael Lewis, chief executive officer (CEO) of Uniper said, in a press release: “This ruling provides legal clarity for Uniper. With the right of termination that we received in the arbitration ruling, we are ending the contracts with Gazprom Export.
“Uniper’s legal position was also confirmed on the issue of damages. Any amounts would flow to the German federal government. From today’s perspective, it is not yet clear whether significant amounts are to be expected.
“Our termination of the contracts with Gazprom Export is the latest in a series of consistent decisions over the last three years. During this time, Uniper has written off its share in the financing of the Nordstream 2 pipeline, its stake in the Russian subsidiary Unipro and allowed its coal supply contracts with Russia to expire.”
Lewis also clarified that, since then, Uniper has taken extra measures in order to expand and diversify its gas branch and suppliers.
Gazprom stops gas supplies to Europe over months
Gazprom’s gas deliveries to Europe were reduced in stages over several months, with Nord Stream 1 gas pipeline supplies being slashed about 75% in June 2022, down to 40 million cubic metres, from 170 million cubic metres a day.
Then, in July 2022, Russia closed down the Nord Stream 1 for maintenance and repairs for about 10 days. However, supplies were further slashed down to 20 million cubic metres once it was back in action.
By the end of August 2022, the Nord Stream 1 pipeline was closed down altogether, with equipment issues believed to be behind the move. Since then, the pipeline has been out of operation.
In September 2022, both the Nord Stream 1 and Nord Stream 2 pipelines faced a series of mysterious blasts, none of which have yet been conclusively traced to a particular player.
