Gazprom to pay over $1.3 billion to RWE after gas pricing arbitration
MOSCOW -- Gazprom has to pay over $1.3 billion compensation to RWE, magazine Der Spiegel reported in an article preview.
RWE said it has been awarded compensation in a dispute over pricing mechanisms of long term gas supply deals, but didn' t indicate how much. The company declined to comment on the report, while Gazprom couldn' t be reached for comment.
The arbitration award ends years of discussions between the two companies on the matter.
Like many of its European peers, RWE' s natural gas business has been suffering heavy losses as oil indexed, long-term procurement prices far exceed selling prices in an over supplied European wholesale market.
RWE' s midstream gas business posted heavy losses as a result of these unfavorable supply contracts, but the company gradually agreed on new terms with its suppliers. The Gazprom contracts were the last remaining supplies that needed to be settled.
Dow Jones Newswires