<article><p class="lead">There is "no chance" of Russia and Ukraine reaching a gas transit deal, after Ukraine's state-owned Naftogaz initiated a new arbitration case against Gazprom, President Vladimir Putin's spokesman, Dmitry Peskov, said on 5 November. </p><p>Naftogaz lodged a claim under Stockholm arbitration rules last week for a retrospective, upward revision of its transit tariff for Gazprom shipments through Ukraine to Europe and Turkey between 13 March 2018 and 1 January 2020 — when the companies' 10-year transit contract expires. The total sum involved could be $11.8bn, Naftogaz managing director Yuriy Vitrenko says. </p><p>This latest claim followed EU-brokered talks between Russia and Ukraine over future transit shipments, held in Brussels on 28 November. </p><p>Peskov referred to comments made by Putin last week that an amicable settlement to outstanding legal cases is needed before a new transit agreement can be reached. Gazprom has appealed against an earlier Stockholm arbitration court award of $2.56bn in Naftogaz's favour as a result of rulings in 2018 — a hearing was held earlier this month. Putin described this penalty as "nonsense".</p><p>But Gazprom could face problems meeting contractual supply commitments in Europe next year if a new deal cannot be reached. The next round of EU-brokered talks are planned for later this month, although no date has been fixed.</p><p>Russia will be reliant on transit shipments through Ukraine until its 31.5bn m³/yr Turkish Stream and 55bn m³/yr Nord Stream 2 projects are operating at capacity — both routes bypass Ukraine, which shipped 86.8bn m³ of transit gas from Russia last year. The first 15.75bn m³/yr leg of Turkish Stream should begin commercial operations at the end of this year, delivering gas for Turkey. </p><p>But the second leg, running through Bulgaria, Serbia and Hungary to Austria, will not be complete until the end of 2020, <a href="https://direct.argusmedia.com/newsandanalysis/article/2008293">at the earliest</a>. And the planned start-up of Nord Stream 2 at the end of 2019 has been delayed — Gazprom is yet to provide <a href="https://direct.argusmedia.com/newsandanalysis/article/2006506">a new timeline</a>, but exports are unlikely before second-quarter 2020.</p></article>
