Ukraine-Russian gas dispute flares

Kiev (AFP) –


A long-running gas dispute between Ukraine and Russia flared up Wednesday when Kiev moved to seize shares in a pipeline that transports Russian gas under the Baltic Sea.

Ukraine's national gas company Naftogaz, which won a case before the Stockholm Arbitration Court against Russia's Gazprom, moved to enforce the ruling by seizing shares in a key pipeline that skirts Ukraine.

"We have begun seizing Gazprom assets -- shares in Nord Stream 1 and 2 in Switzerland," Naftogaz's commercial director Yuriy Vitrenko said on Facebook.

The Stockholm Arbitration Court ordered Russia's Gazprom in February to pay $2.56 billion to settle all of their legal disputes and resume deliveries of Russian gas to Ukraine.

The two companies had demanded tens of billions of dollars from each other in a dispute over an expensive 10-year contract Ukraine signed in 2009 after Gazprom cut its deliveries in the middle of the winter.

Gazprom refused to resume deliveries and moved to get the ruling overturned by a Swedish appeals court.

The Nord Stream 1 undersea pipeline, which has been in operation since 2011 can now carry over 50 billion cubic metres of Russian gas to Germany.

The pipeline under the Baltic Sea, in which Gazprom is the majority shareholder, significantly increased its ability to transport gas to Europe without shipping it through Ukraine.

Preliminary work on the construction of a second pipeline Nord Stream 2, has gotten underway.

Both are formally registered in Switzerland, where Naftogaz has sought to have the arbitration ruling enforced.

Ukrainian President Petro Poroshenko said on his Facebook page that Naftogaz was also seeking to seize Gazprom assets located in Britain and the Netherlands.

Gazprom acknowledged in a statement sent to Russian news agencies that Naftogaz had taken steps against it in Switzerland, but that it had not received any official notification concerning seizure of its assets and would "defend its rights under the law".

Ukraine and Russia have both fought several "gas wars" that have seen Moscow halt supplies to Kiev, occasionally disrupting supplies to Europe, with the legal battles heating up after the arrival of a pro-Western leadership in Kiev in 2014.