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Ukraine could destroy Nord Stream 2 and make good money on it

Author : Oleksiy Kushch

Source : 112 Ukraine

Ukraine, which had a monstrous head start for creating its own gas hub (underground storage facilities, the largest GTS), turns from a hub into a gas dead end
11:00, 21 May 2021

Open source

The press conference of President Zelensky was held in the building of the Antonov aircraft plant in Kyiv. Two years ago Zelensky was a "libertarian": with PM Honcharuk, the "creative destruction" of industry, and other crap. And now he is becoming a "state builder". To do this, he needs to be "hooked" on the giant wing of the unfinished Mriya aircraft.

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All the "show" with the launch of a satellite on someone else's rocket (the same can be done by any European company or middle-class university), a defile on Antonov among the remains of unfinished aircraft - all this is the entourage for celebrating the 30th anniversary of Independence Day. Almost like in "Ordinary Munchausen": "At first they planned arrests, then festivities, in the end, they decided to combine them."

Zelensky's opponents like to call him a "clown" or a "comedian." In fact, if you try to reveal the metaphysical depth of what has happened in recent years in Ukraine, you will recall Stephen King's mystical novel "It" with the dancing clown Pennywise. As Wikipedia says, "It wakes up every 27 years." In 2019, when Zelensky became president, a full 27 years have passed since the date of the proclamation of our independence, and I am not hinting at anything...

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"It" feeds on people's fears and hopes, and Zelensky's stunning election victory is not just the result of a successful media project, but also a consequence of much deeper psychological trauma of society: hope for justice, fear of war. This psychic energy can be very easily converted into pure power (and then into pure capital) if you find the "key" to the souls of people. And Zelensky found it.

His press conference is taking place against the backdrop of the lifting of sanctions on Nord Stream 2 by the United States. This was officially announced in the American State Department. The list of sanctions excluded Nord Stream 2 AG, its corporate employees and Matthias Warniga. The lifting of sanctions is motivated by "national security interests." By the way, who does not know, Matthias Warniga, managing director of Nord Stream 2, by a strange coincidence, is a former employee of the Ministry of State Security of the GDR.

US Secretary of State Anthony Blinken added: "Today's action demonstrates the administration's commitment to energy security in Europe, which is consistent with the president's pledge to restore relations with our allies and partners in Europe."

In simple words, "the fight against the Russian Federation is important for us, but Germany is more expensive." Nobody even remembered Ukraine and its interests. Apparently, we are not included in the list of "partners and allies." Or don't we belong to "Europe"?

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In the decision of the United States, everything is "remarkable": the exchange of transit through the territory of Ukraine for the "selfish interests" of the West, and the fact that taking away from us several billion dollars a year that we received for transit, no one even thought about the appropriate compensators at least in the form of trade preferences, not real money. For example, the same USA, lifting sanctions on Nord Stream 2, could simultaneously abolish the protective duty of 25% on Ukrainian metal, and Germany could provide financial assistance to increase gas production in Ukraine in order to reduce our dependence "on pipes ".

By the way, in the first days of his tenure, Biden imposed sanctions against the pipeline, but only against the Canadian one, through which oil from the province of Alberta was supposed to go to Texas refineries. The sanctions were imposed despite the fact that the largest Canadian banks and pension funds spent billions of dollars on it, not counting the colossal costs incurred by the provincial budget in the form of direct grants and issued guarantees. When it comes to national interests, the United States will not spare even the youngest "Canadian brother."

The other day, the head of the operator for managing our GTS announced that Ukraine's loss from the launch of Nord Stream 2 will amount to 5 billion a year. This amount includes both direct losses from the reduction in transit and indirect: gas will become more expensive for us due to the "lengthening" of the logistics shoulder (the old dream of the "reformers" will come true - the missing gas is actually, and not on paper, we will buy in Germany and Poland, at local hubs). The amount of losses does not take into account the loss from the launch of the Turkish Stream, which we prefer not to remember. It is significant that two of our allies, Turkey and Germany, when it came to their selfish interests, immediately forgot about Ukraine, for which the loss of 5 billion would be significant. Desire to earn the same $ 5 billion it turned out to be stronger than the "value system".

The impossible happened: Ukraine, which had a monstrous head start for creating its own gas hub (underground storage facilities, the largest GTS), turns from a hub into a gas dead end, and Poland, Turkey, and Germany become the hub countries, which seem to have no chance at all. ... We could earn up to 5% of GDP on a logistics margin, but instead, we will spend an additional 1-2% of GDP on an extended transport leg. What is commonly called "self-fulfilling hopes" or, in a simpler way, "all desires are material" took place.

After all, we talked for so long that we were not buying "Russian gas" (although it was precisely this gas that was taken from the pipe, carrying out only calculations with "gas gaskets" in Luxembourg and Switzerland, that is, on paper).

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And the formula for import parity "hub +", which was the usual way to increase the price of gas, in the near future will become a very real mechanism of "market pricing". Gas will indeed be supplied to Ukraine (this time physically, and not only "financially") from Polish and German hubs with a corresponding increase in market prices for consumers, without exceptions for the population. And now about the rational choice, or rather about the implementation thereof in the conditions of Ukraine. A rational politician, choosing between a one-time payment of $ 3 billion in favor of the state and the annual income of his country in the same $ 3 billion, will naturally choose the second option. A rational individual, whose family lives abroad, and here he is just at the "coven", will choose the first option.

Why does he need this country if he is connected with it only by a temporary labor contract! He immediately takes everything he earned here abroad, without even investing his "bonuses" in the national economy. This is what happened in Ukraine. The creation of a hub for us was quite realistic. To do this, it was necessary to pre-trial the dispute with Gazprom and involve EU operators in the unbundling of Naftogaz. In this case, Nord Stream 2 could face the fate of the underutilized Turkish Stream. We would have won economically, and not with the help of sanctions, bypass routes for transporting gas to Europe. But for this it was necessary to do two things: forget about the possibility of receiving bonuses for the arbitration won in Stockholm (along the way, taking on a hefty portion of criticism from the "patriots"), cause discontent in one embassy, and give the have to give up their "pocket operator").

By and large, something happened that we wrote about in our articles all these years. To put it bluntly: "These idiots in power will one day wake up and find a working Nord Stream 2 and an empty Ukrainian pipe."

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Over the years, no one has listened to our advice on creating an Eastern European gas hub in Ukraine, geographically linked to Ukrainian underground storage facilities. In this case, over time, the Ukrainian hub could move into a mature phase of development in a few years and become a price benchmark, as well as a mechanism for hedging risks associated with gas portfolios. And we would no longer have to tie the price to import parity if a transparent and efficient market pricing mechanism would appear. In this case, systemic Western gas traders, not politicians, would negotiate gas supplies with Gazprom. Any gas pipeline is initially a pile of metal. If we managed to "strangle" Nord Stream 2 with the help of the economic benefits of gas transit through the territory of Ukraine, we would not have to resort to any sanctions. We would simply drag the main flows onto ourselves. But for this, it was necessary to carry out the correct model of Naftogaz unbundling, and not to use the ugly version of crossing a hedgehog with a snake. That is, to take away the "gas nipple-drinker" from the political elites, who are in power.

As recent history shows, getting rich due to the transit margin is the lot of all prosperous countries, such as Germany, Turkey, or Poland, which not only occupy an advantageous geographical position at the junction of commodity markets and consumption markets but also whose power is mindful.

Well, ending with Zelensky's press conference, who listened, write in the comments, did you not come up with the idea of ​​creating a grain pipeline based on our GTS?

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