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Gazprom May Start Price Dispute With Turkey-Based Private Gas Importers

© Sputnik / Mikhail Voskresenskiy / Go to the mediabankGazprom office building
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Russia's state-owned gas exporter Gazprom plans to initiate a trade dispute via international arbitration with its private gas import partners in Turkey, local media said Friday.

Russia’s energy giant Gazprom - Sputnik International
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MOSCOW (Sputnik) The company's Gazprom Export subsidiary has already prepared documents needed to file the lawsuit in what is a dispute over prices for 2017, the Kommersant newspaper reported, citing sources from Gazprom and Turkey.

The lawsuit, likely to be filed at the Arbitration Institute of the Stockholm Chamber of Commerce, will involve private companies importing Russian gas to Turkey, including Akfel Gas, Enerco Enerji, Avrasya gaz, Bosphorus gaz, Shell, Bati Hatti and Kibar Enerji, according to the publication.

The companies had rejected a Gazprom price offer, which involved settling for a temporary arrangement, above 2016 levels, lasting until the company settles its ongoing dispute with Turkey's state-owned BOTAS Petroleum Pipeline Corporation.

The dispute started in December, when Turkey nationalized Akfel Holding, the country's largest gas importer partly owned by Gazprom. The nationalization, driven by Turkey's purge of alleged Islamic preacher Fethullah Gulen's supporters on the board of directors, led Gazprom to discontinue 2017 pricing talks and the two companies went to Stockholm to argue over prices. Turkish sources told Kommersant that the nationalization was key in influencing Gazprom's position on BOTAS, while company sources said this was a regular commercial dispute.

The fresh dispute, in which Gazprom will sue all of its partners in its second-largest market after Germany, was necessary since low prices would harm the company as well as undermining its position in the dispute with BOTAS, the newspaper said.

The dispute comes as the two countries continue the process of rapprochement following an earlier standoff over the late 2015 Su-24 downing incident in Syria. Another source told the newspaper that Gazprom was moderating its position in the dispute due to the sensitive nature of Russian-Turkish cooperation as well as the importance of the joint Turkish Stream gas pipeline project.

A dispute between Gazprom and Turkish importers also took place last year after Gazprom Export reduced its gas supplies to Turkey and canceled a 10.25-percent price discount. The dispute was settled in April.

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