Czech RWE Transgas wins natural gas take-or-pay lawsuit with Gazprom

Katya Zapletnyuk

24-Oct-2012

Czech incumbent RWE Transgas has won an arbitration against Russia’s natural gas major Gazprom over the take-or-pay clause in their long-term supply contracts, the Czech company told ICIS on Wednesday.

RWE Transgas declined to comment further, but ICIS understands Gazprom has lost the case for the recovery of advance payments for under-lifted gas under the take-or-pay condition in 2008, 2009, 2010 and 2011. The case filed with the Wiener Internationalen Schiedsgerichts is reportedly worth $500m (€386m).

Another lawsuit regarding revising the existing price formulae in the contracts continues and RWE Transgas expects a decision in the first quarter of 2013. The company spokesman said RWE Transgas wants the price formulae to be competitive and in line with market conditions.

RWE Transgas had posted a Czech Koruny (Kc) 4.8bn (€198.4m) loss in 2010 because of the price difference between gas sold on spot markets and the company’s imports based on long-term contracts with an oil-indexed formula (see ESGM 6 May 2011).

“RWE Transgas was facing the disadvantage of long-term contracts compared with purchasing gas on spot markets. That situation combined with increasing competition resulted in our regional gas distributors losing their customers,” Martin Herrmann, RWE Transgas CEO had said at the time.

RWE Transgas has a 9 billion cubic metres (Gm³) supply contract with Gazprom until 2035 with a 90% take-or-pay obligation.

The Czech incumbent, which accounts for 87.7% of all gas imported into the country, has increasingly lost market share to independent suppliers. The majority of new entrants, with the exception of the second-largest supplier, Vemex, controlled by Russia’s Gazprom, have been bringing in gas from Germany, where they buy it on the spot market.

Gazprom could not be reached at the time of press on Wednesday. KZ

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