Portsmouth City Council aims to renew its agreement with the Russian gas giant.

Portsmouth City Council aims to renew its agreement with the Russian gas giant.

A council is reconsidering its decision to terminate a £5.5 million contract with a Russian gas company.

In response to the conflict in Ukraine, Portsmouth City Council planned to use a break clause to terminate its contract with Gazprom in September.

The move comes as the German energy regulator takes over the parent company’s UK arm.

On June 21, the authority’s cabinet will be asked to reconsider its decision to cancel the contract.

“‘No money from the contract is being returned to the Russian state,’ according to a report by the council’s head of energy services, Andrew Waggott.

‘Unavoidable cost rise’

“Terminating the contract with Gazprom M&T will result in an inevitable cost increase to the council that cannot be quantified, but it will have a negative effect,” Mr Waggott said.

According to the report, its parent company, Gazprom Germania, is unable to purchase Russian gas due to sanctions.

Several councils, including Eden District Council, have stated in recent weeks that they will no longer be able to terminate similar contracts, citing German control over the company as the reason.

The city council can use a break clause this month to terminate the three-year contract, which was only signed in October, for a fee of £57,000.

A replacement contract, according to leader Gerald Vernon-Jackson, would have cost about £1 million more per year.

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