Gazprom loses fight to Germany's RWE

July 10, 2013 at 7:53 AM

MOSCOW, July 10 (UPI) -- Russian energy company Gazprom said it would adjust its gas price contract with German utility RWE within a month following a court ruling.

A court of arbitration in Vienna issued a ruling potentially ending Gazprom's long-time practice of linking natural gas deals to oil contracts.

Gazprom Deputy Chief Executive Officer Alexander Medvedev said the contract with RWE would be amended following the ruling.

"We'll do this within a month," he was quoted as saying Tuesday by state news agency RIA Novosti. "We are interested in doing this quicker because amendments [to the contract] will be made before final documents are signed."

Gazprom under the ruling is obligated to make retroactive payments to the German utility calculated from May 2010. RWE suggested the back payment would be around $1.3 billion.

RWE was a stakeholder in the Nabucco West natural gas pipeline, sidelined by a consortium in Azerbaijan. The pipeline was included in a network of European transit projects dubbed the Southern Gas Corridor, a series of pipelines meant to break the Russian grip on the European energy sector.

RWE in January commissioned its Gazelle natural gas pipeline in the Czech Republic, which connects to Russia's Nord Stream natural gas pipeline through the Baltic Sea.

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