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Chances are high to settle dispute of Gazprom and Botas out of court: experts

Chances are high to settle the discrepancies between Gazprom and Botas over the Russian gas price discount out-of-court. Experts polled by the Energy Expert Center doubt that Turkey’s decision to take Gazprom to international arbitration over the gas price discount will have any serious consequences, the more so as it is politically  motivated.

“Turkey’s decision could result from the need to demonstrate rigidity towards Russia, which Turkey has foreign policy discrepancies with, and cushion opposition’s criticism ahead of elections,” says Deputy Head of the National Energy Security Fund Alexey Grivach.  In his words, Gazprom and Botas had agreed on the discount long ago, but at a political level it was decided to finalize agreement simultaneously with the intergovernmental agreement on the Turkish Stream. However, “the sides failed to sign the full package due to the political crisis inside Turkey where after the summer elections to the parliament, the political parties failed to form the government and early elections were announced.  The elections are scheduled for next Sunday,” the expert says. “If they manage to form the government, the dispute can be settled out of court.”

Sergey Pikin, Director of Energy Development Fund, in turn, says “such disputes over gas price have been observed repeatedly. It is a normal practice of work on such deals. Turkey is not the only country to be at law with Gazprom. Many countries and companies did and still do the same. It is a normal trading position when they bargain for a lower price.”

EADaily reported earlier that Turkey took Gazprom OJSC to international arbitration over the Russian gas price. On October 26, Turkey’s Botas informed Gazprom about its claim. The relations of Russia and Turkey soured after Russia launched air strikes in Syria. Ankara slammed Moscow for the military operation in Syria. In addition, the gas price for Turkey has not been determined either. In September, Turkey’s acting minister of energy said they expect a 10.25 percent price discount on gas from Gazprom, The two countries agreed upon the discount yet in 2014. However, it was linked to the Turkish Stream project.  The two countries have not documented any agreements on the implementation of the project yet.

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