The decision was made public by the Deputy Chairman of the Board of the Russian company, Alexander Medvedev.
Taken into account Ukraine's over-2-billion-dollar arrears to Russian Federation for gas deliveries, Naftogaz is counting on receiving about 2.56 billion dollars from Gazprom, he said. "In such a situation, the continuation of contracts is economically inexpedient and unprofitable for Gazprom", Miller said.
Kyiv and Moscow were drawn into a new gas dispute on March 1, after Russia's state-owned Gazprom unexpectedly decided not to restart supplies to Ukraine, forcing Kyiv to reduce supplies despite freezing temperatures. The decision has violated the balance of interests of the parties under these contracts, the head of Gazprom said.
The Russian gas giant said the outcomes of the two legal proceedings have resulted in a significant imbalance between Gazprom and Naftogaz as far as gas supplies and transit are concerned, contradicting the basic principles of Swedish law under which the contract is regulated.
Itkonen did, however, indicate that gas supplies to the bloc are not being affected yet. Naftogaz also referred to the negotiations earlier offered to Gazprom on the need to revise the transit tariff from 2010 in accordance with the European rules.
The current gas standoff is part of a wider political conflict between Russian Federation and Ukraine, which flared up in 2014 when a pro-Moscow Ukrainian president fled Kiev following violent street protests. That's all, it's so easy, " Vitrenko told one of Ukrainian TV channels, answering the question what foreign assets of Gazprom could be arrested for failure to comply with the Stockholm Arbitration.
A Gazprom spokesman did not respond to a request to comment on possible risks to the Russian gas exports to Europe. What is unclear is how the transit deal will be affected by the row: Gazprom delivers some 80% of the approximately 110bcm of gas it sends to its Western European customers via the ironically named Druzhba, or "Friendship", pipeline that runs across Ukraine.