Portsmouth to scrap multi-million pound deal with Russian energy giant Gazprom backed by president Putin amid the outrage over Russia's invasion of Ukraine

By Joshua Wright
Published 10th Mar 2022, 04:55 BST
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A NEW multi-million pound contract with Russian state-controlled energy giant Gazprom to supply gas to Portsmouth City Council buildings is to be scrapped in the wake of the invasion of Ukraine, it can be revealed.

Council leader Gerald Vernon-Jackson said it would use a break clause to end the three-year deal early but also urged the government to ban its UK subsidiary to make the process easier.

'As I understand it, there will be a financial penalty but that's a small price to pay compared to what Ukraine is facing and goes towards showing our solidarity with them,' he said.

However, he is facing calls to take action sooner.

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Russian President Vladimir Putin attends a meeting with his Azerbaijani counterpart at the Kremlin in Moscow on February 22, 2022. Photo by MIKHAIL KLIMENTYEV/SPUTNIK/AFP via Getty Images)Russian President Vladimir Putin attends a meeting with his Azerbaijani counterpart at the Kremlin in Moscow on February 22, 2022. Photo by MIKHAIL KLIMENTYEV/SPUTNIK/AFP via Getty Images)
Russian President Vladimir Putin attends a meeting with his Azerbaijani counterpart at the Kremlin in Moscow on February 22, 2022. Photo by MIKHAIL KLIMENTYEV/SPUTNIK/AFP via Getty Images)

The contract with Gazprom Marketing and Trading Ltd, which was only signed in October, is estimated to be worth almost £5.5m and sees the it manage the supply of gas to buildings owned by the city council, including council homes, libraries and the civic offices.

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The London-based arm of the world's largest natural gas company provides more than a fifth of commercial gas in the UK and works with a number of public bodies.

Gazprom has close ties to Russian president Vladimir Putin, who brought it back under state control when he came to power in 2000.

Leader of Portsmouth City Council, Cllr Gerald Vernon-Jackson. Outstanding volunteers were honoured for their work during the pandemic at a ceremony in the Lord Mayor's banqueting hall, Portsmouth Guildhall Picture: Chris Moorhouse (jpns 291121-15)Leader of Portsmouth City Council, Cllr Gerald Vernon-Jackson. Outstanding volunteers were honoured for their work during the pandemic at a ceremony in the Lord Mayor's banqueting hall, Portsmouth Guildhall Picture: Chris Moorhouse (jpns 291121-15)
Leader of Portsmouth City Council, Cllr Gerald Vernon-Jackson. Outstanding volunteers were honoured for their work during the pandemic at a ceremony in the Lord Mayor's banqueting hall, Portsmouth Guildhall Picture: Chris Moorhouse (jpns 291121-15)

Many organisations are now seeking to cut ties with it, with Porstmouth City Council becoming the latest to confirm its intention to cancel its contract.

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'We have reviewed what we can do to get out of this contract and there's a break clause we can use which allows us to leave after a year.' Cllr Vernon-Jackson said. 'To use that we have to give notice in June and that's what we are planning to do.'

A council spokesman added: 'Via a broker, we have a contract with Gazprom Energy for the supply of gas to council-operated buildings. We're urgently reviewing our options for bringing this agreement to an end.'

The contract which had been due to end in September 2024 is worth an estimated £1.8m a year.