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Gazprom will be forced to enter into transit agreement with Ukraine on its terms

Author : News Agency 112.ua

Gazprom’s positions in negotiations with Ukraine have collapsed again. And now the construction time of the Nord Stream 2 most likely will be moved to mid-2020
20:38, 20 May 2019

gas supplies
Open source
 

Postponing the Nord Stream 2 launching for a year is perhaps the last huge victory for Ukraine in this presidency of Poroshenko. One Russian citizen speaks eloquently about this result:

“If Denmark demands a change of route, Nord Stream 2 will be completed by mid-2020, the operator of the pipeline Nord Stream 2 AG said.”

For the project itself, this is not fatal: plus or minus six months for such large-scale projects is not a time limit. The problem is purely political. The Kremlin was preparing all projects to bypass Ukraine with deadline - December 31, 2019, when the transit agreement with Ukraine expires.

The math is simple: about 80-90 billion cubic meters of gas to Europe pass through Ukraine. So, two bypass routes - South Stream and Nord Stream 2, according to the initial plan, should have deliberately blocked the Ukrainian transit and created additional transfer capacities.

Initially, South Stream had a design capacity of 30 billion cubic meters, and then it increased to 63 billion. The capacity of Nord Stream 2 is 55 billion. In total, they gave a transit power reserve of almost 120 billion cubic meters, which made Ukraine’s position on negotiations transit zero. Then the tale is over.

Initially, the South Stream project stopped, and the Turkish project with the same parameters was developed by just two months. Turkey did not agree with that, so it had to urgently start a war in Syria.

The war began on September 30, 2015, ended on November 24, when the Turks shot down a Russian plane and Putin darted to hide in the bushes, without risking further direct escalation.

Russia lost the war in Syria, leaving only 15 billion cubic meters of transit in the Turkish Stream. 120 billion shrunk to 70.

The question arose of the need to conclude a transit agreement with Ukraine. The Kremlin "graciously" allowed pumping about 15 billion cubic meters after 2019.

Then the difficulties with the Nord Stream 2 began. It was nevertheless included in the EU Gas Directive, which requires gas transmission system owners to provide at least 50% of their capacity to third suppliers. 55 billion cubic meters of the Nord Stream turned into 27.5.

Related: Negotiations on new gas contract to take place after Zelensky, Putin talk, - Naftogaz CEO


Gazprom’s positions in negotiations with Ukraine have collapsed again. And now the construction time of the Nord Stream 2 most likely will be moved to mid-2020.

And maybe even to later date, since the operation will begin with trial starts, a phased increase in power, tests and the like.

To put it another way, Gazprom approaches the talks on transit with Ukraine with 15 billion cubic meters of the Turkish Stream, that's all. Moreover, these 15 billion is also in the project. It should be at first build, then launched.

And you need to conclude a contract until January 1. From January 2, a new contractual period begins. The Third Gas War for Gazprom will be fatal: it will demonstrate its incapacity and insecurity as a supplier.

And in the face of rising gas supply surplus, all its competitors will take advantage of this.

Accordingly, now Gazprom will be forced to conclude an agreement with Ukraine on its terms. Russian positions are too weak.

Strictly speaking, Putin can strengthen his position by unleashing a small war in Donbas (or creating a crisis there, offering concessions in the treaty from Ukraine in exchange for its settlement), but even here his capabilities are extremely weak: it’s not 2014 and his military exercises will not be a surprise to anyone.

Hence, by the way, Putin’s obvious interest in Venezuela. In fact, he do not care about Maduro himself, he will betray the drug president, not flinching once. But he needs to exchange Venezuela for something else. For the gas transit to Europe, for example.

The Americans sympathetically promise to consider a tempting offer, but they are waiting, knowing well that there is nothing to trade with Putin, since he is no one in Venezuela. He can create small related difficulties, but nothing more.

And therefore, any proposals for exchanging are pure bluffs; Putin has no trumps in his hands.

Well, if, by the end of the year, Turkey creates problems on the route of the Turkish Stream (or not Turkey, but the following transit countries), then this will be a complete catastrophe for Gazprom, which will actually face the fact that its plan to bypassing Ukraine suffered a crushing defeat.

However, nothing surprising: considering the hypocrisy of Gazprom’s top managers and Putin’s complete inconsistency as a politician, the result is quite predictable.

Related: American diplomats visited Burisma Group gas fields

Related: Russia started negotiating with Ukraine to continue gas transit after elections

 

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