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Third gas crisis: Chronicles of new Gazprom war against Ukraine

Author : Mykhailo Honchar, Serhiy Zhuk and Andriy Chubyk

23:17, 7 February 2017
Third gas crisis: Chronicles of new Gazprom war against Ukraine

Author : Mykhailo Honchar, Serhiy Zhuk and Andriy Chubyk

Russia started using some non-military instruments in the wars of new generation, the preparations for which were unnoticed for the outside world

23:17, 7 February 2017

Read the original article at eurointegration.com

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January 2006 and January 2009 were emblematic months for relations between Ukraine and Russia. The start of these two years was marked by the gas crisis.

Now we can add that things were about Russia using some non-military instruments in the wars of new generation, the preparations for which were unnoticed for the outside world.

Both gas crises triggered and controlled by the Kremlin, were intended to increase the level of energy, and therefore - economic and political Ukraine's dependence on Russia and demonstrate Europe the need to implement projects of gas pipelines bypassing Ukrainian territory. They say that Ukraine is an unreliable transit link.

Now, in 2017, the Kremlin came very close to launching a third gas conflict.

The first signs of a new conflict

In 2014 Russia staked largely on energy lesions of Ukraine through gas blockade, creating a shortage of anthracite coal and electricity.

In mid-June 2014 against the backdrop of Novorossia project development Russia started a gas blockade of Ukraine. Gazprom has completely stopped gas supplies to Ukraine, and when in December finally restored it under the pressure of the European Commission, at once, from the first quarter of 2015, limited to the minimum the volume of gas exports to the EU to prevent reverse of gas to Ukraine.

The main transit route Urengoy - Pomary - Uzhgorod was also the subject of diversions. It was assumed that all of this together will lead Kyiv first to energy, than to military and political surrender.

A radical reduction in gas consumption and the success of reverse supply on the background of falling world prices for hydrocarbons, anthracite imports from non-Russian sources, and increased supply of nuclear fuel from an alternative supplier reduced the possibility of using the energy component of the hybrid aggression of Russia against Ukraine.

Related: Private companies to import 15 times more gas into Ukraine

Instead, the United Energy System of Ukraine has got to the point of attack.

The first large-scale attempt to lead Ukrainian UES to blackout by cyber attacks took place on December 23, 2015. A year later, on 17 December 2016, there was a re-try.

Fortunately, these attacks were unsuccessful, although they caused some damage.

Even after zeroing imports of Russian gas by Ukraine Russia continues its attempts to resort to use of the energy component of hybrid war.

The newest scenario from Gazprom

Beginning from the late summer of 2016 we can be the witnesses of Russia preparing to provoke a third gas crisis.

The confirmation of such intentions could be the working pressure pulsation in gas pipelines at the entrance to Ukraine, which are usually used in the transit of gas from Russia to the EU. It is obvious that Russia's calculations predicted that Ukrtransgaz with the same pressure pulsations will transmit gas to European consumers through Ukraine – EU border. Of course, this would have caused dissatisfaction of EU companies and, consequently, the insistence of Gazprom in need of North Stream-2 due to "deterioration and high accident rate of Ukraine’s gas transit system.

After maximizing of gas supplies to the EU, especially in transit through Ukraine in the fourth quarter of 2016, Gazprom can minimize it at some point during the first quarter of 2017, just as this company did in the first quarter of 2015.

The goal is that in the case of additional taking of fuel gas by Ukrtransgaz from the transit flow to ensure proper technical conditions of working pressure in the pipeline, Gazprom can accuse Ukraine of stealing transit gas destined for consumers in the EU.

Russia creates the next propagandist algorithm: Ukraine steals gas, because it has not enough in its underground storages (UGS) and refused to purchase additional volumes from Gazprom. Thus, Russia can’t continue gas transit through Ukraine because Ukraine steals the gas from the transit flow - and Gazprom can stop the transit through Ukraine.

In this way can be caused the third gas crisis, where all the power of Russian propaganda will put Ukraine responsible for the crisis, and Gazprom will become the savior of Europe.

The gas reserves in underground storage facilities - propaganda vs reality

Media illustrations for Russian preparations of provoking the gas crisis were statements about low level of filling Ukrainian underground gas storages – and that’s why Kyiv allegedly begins to steal Russian gas.

Initially these theses were voiced by some officials, but from 14 December the propaganda campaign was joined by the Russian president. "Putin expressed concern about the attempts of the Ukrainian side to dodge the agreements on gas purchases in the current winter season. He noted that it threatens gas transit to Europe," said in a statement of Kremlin after a telephone conversation with German Chancellor Angela Merkel.

Related: Russia announces about gas supplies launch to occupied Crimea

And on December 19 personally the head of Gazprom Aleksey Miller said frankly: Gazprom sees some risks for the gas transit through Ukraine to Europe, and in case of unsanctioned stealing of gas, the company may stop its supplies to the EU. "

Winter risks and position of the EU

The main risk factor is the possibility of increasing the transit of gas through Nord Stream – OPAL system by Gasprom. Permission for this on October 29th has been received from the European Commission, though later the decision of the European Commission was suspended.

What if Gazprom increases the transit through Nord Stream? Ukrainian gas transit system objectively and technologically could find itself in unstable mode of operation.

This situation is similar to last summer, when Gazprom did not provide an adequate pressure and Ukrtransgaz was forced to compensate low pressure at the output of the Russian pipe with its own gas.

In the case of realization of this scenario Ukrainian side should fully withdraw its responsibility for transit and lay it on the European Commission. Moreover, Ukrainian Naftogaz" is not a third party in bilateral contracts between Gazprom and its European customers.

By its decision regarding OPAL system the European Commission essentially creates for Gazprom some  legal prerequisites for manipulating with directions and volumes of gas supplies to Europe that can cause even more turbulence in the gas market of the EU.

However, whether the EU is able to quickly respond to the provocations of Gazprom?

As the events of 2009 show, the European Commission is not able to quickly identify the initiator of manipulations. In fact, exactly the inability or rather unwillingness of Brussels to make an official "verdict" about what happened in January 2009 - Ukraine interrupted the transit or Russia cut the supplies - encourages the Russian side to repeat the crisis scenario.

Related: No more gas talks in Ukraine-Russia-EU format planned this year

And Russia certainly needs it as the last argument to convince the European Commission of the need to agree on the use of North Stream-2. Ukraine will be called the unreliable transit link.

Moreover, the decision of the European Commission and the German side ignoring the verdict of the European Court of December 23 undermines the reform of oil and gas sector in Ukraine.

In these circumstances, the Ukrainian side should consider the option to suspend (not to cease!) this kind of unbending that predictably leads to additional losses for Ukraine. On this issue we need urgent consultations with the EC.

As a result, if the Commission decides on compensation of our losses created by Gazprom’s permission to maximize the use of OPAL system, then we can talk about further steps to reorganize Ukrainian Naftogaz.

Related: "Naftogaz" considers statement of "Gazprom" on the risks of gas transit to Europe as preparation of new gas crisis by Russia

Related: Gazprom: Ukraine’s refusal of to buy Russian gas endangers gas transit to Europe

Related: Russia plans to raise gas price for Ukraine in the first quarter of 2017

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