German energy company Uniper has officially terminated its gas supply contracts with Gazprom Export, a unit of Russian gas giant Gazprom.
This marks the end of a long-term energy relationship between Uniper and Gazprom.
The decision follows a 7 June 2024 arbitration tribunal award which granted Uniper the right to end the contracts and awarded the company more than €13bn in damages for undelivered gas volumes since mid-2022.
The Stockholm-seated tribunal, applying Swiss law, delivered a legally binding decision that allowed Uniper to conclude contracts that would have otherwise persisted into the mid-2030s.
Despite limited deliveries since June 2022 and a complete halt at the end of August 2022, the contracts had remained legally binding until this ruling.
Uniper, which had been facing severe financial strain due to the lack of Russian gas and the resulting need to purchase gas at high market prices, initiated arbitration against Gazprom Export at the end of 2022.
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By GlobalDataUniper CEO Michael Lewis stated: “With the right of termination that we received in the arbitration ruling, we are ending the contracts with Gazprom Export. 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. Since then, Uniper has worked hard to diversify its gas business and is now well-positioned with its global LNG [liquefied natural gas] portfolio and pipeline gas supplies from various regions.”
The contracts, which Uniper inherited from its predecessor companies on its founding in 2016, have been a cornerstone of the German-Russian energy partnership since the 1970s.
The EU has not sanctioned the gas supplies, yet Gazprom Export ceased deliveries, forcing Uniper to incur daily additional costs of hundreds of millions of euros.
The German government’s intervention with a stabilisation agreement in December 2022 and its subsequent role as the main shareholder prevented Uniper’s insolvency.
