The Czech Republic's national gas transmission system operator Net4Gas has just announced that it has won a second lawsuit in an international arbitration lawsuit with Russian gas giant Gazprom.
Net4Gas previously earned money from transiting Russian gas to Europe via the Nord Stream gas pipeline in the Baltic Sea. The sabotage that occurred in September 2022 caused the Russian gas pipeline to stop operating, Gazprom also stopped payment.
"Net4Gas would like to inform you that the company has received a favorable verdict in the second arbitration lawsuit. The arbitration court agreed with the arguments made by Net4Gas and ruled in favor of the company's entire compensation claim against Gazprom Export and its parent company," Net4Gas said in a report to investors.
The company said it will continue to consider the next steps to recover the compensation according to the arbitration award.
Net4Gas also announced a victory in its first arbitration lawsuit against Gazprom in September, but did not disclose the specific amount of compensation requested.
Net4Gas and Gazprom used to have a long-term gas transit contract. Accordingly, Russian gas transported via Nord Stream is delivered to the Czech gas system.
However, at the end of August 2022, Gazprom stopped supplying gas via Nord Stream due to sanctions against Russia and could not repair turbines at the gas compresssion station. On September 26 of the same year, two branches of the Nord Stream pipeline exploded at the bottom of the Baltic Sea.
In January 2023, Net4Gas said it would not receive monthly payments from Gazprom under the contract. In April, the Czech company decided to file a lawsuit against the referee and request compensation for damages.
The loss of gas transit through Nord Stream is considered a serious loss to the business operations of Net4Gas.
The company reported that in 2021, gas transit through the Czech territory reached more than 42 billion m3. But by 2023 and 2024, this figure will decrease sharply to below 1 billion m3. The company's profit in 2021 was 294 million USD, but by 2024 it will be only over 400 thousand USD. In 2023 alone, Net4Gas reported a loss of up to 26 million USD. CEO Andreas Rau described 2023 as the most difficult year in Net4Gas' history.
The consequences of the sharp decline in Russian gas sources are the high cost of domestic gas transportation in the Czech Republic and the transit of gas to neighboring countries.
Meanwhile, Gazprom has said it does not recognize international arbitration decisions under current conditions and believes the decisions are unfair.
The Russian gas company has sought to stop arbitration proceedings through a ban from the St. Petersburg Arbitration Court. Petersburg and the Leningrad region, and imposed a fine of 113 million euros on partners. However, Net4Gas is determined to pursue compensation for losses related to the loss of gas transit through the Nord Stream gas pipeline.
