In the European Union, not everyone considers the new branch of the Russian gas pipeline to be an exclusively economic project
Trilateral negotiations with the participation of representatives of the European Union, Russia and Ukraine on the possibility of maintaining gas transit through Ukrainian territory after 2019 ended in vain. According to the Minister of Energy of the Russian Federation Alexander Novak, it is necessary “to create such economic conditions that would be competitive in relation to other directions – the same Nord Stream, Turkish Stream”.
Currently, Gazprom and the state-owned Ukrainian company for the production, transportation and processing of oil and natural gas, Naftogaz, are continuing litigation. The fact is that in February last year, the Stockholm Arbitration Court ruled that Gazprom should pay Naftogaz $ 2.56 billion in compensation and another $ 4.7 billion for transit in 2018-2019. At the same time, Naftogaz was allowed to take 10 times less gas than was originally written in the contract.
Gazprom believes that this decision (made on the amount of two counterclaims – a contract for direct supplies and transit through Ukraine) is “asymmetric”. The Ukrainian side believes that the decision of the Stockholm Arbitration is not subject to revision. The next round of negotiations has been postponed to May, that is, after the presidential elections in Ukraine.
“Ukraine has received great support from the European Commission”
The correspondent of the Russian service “Voice of America” asked the expert on energy issues of the group of advisers to the government of Ukraine (SAGSUR) Karel Hirmana, what, in his opinion, should be done by official Kiev in order to minimize economic damage in the event of commissioning "Nord Stream 2" and "Turkish Stream"?
The Slovak expert believes that after the launch of both pipelines by Gazprom, it will be too late to do anything, since in this case there will be no need for gas transit through Ukraine. “We need to jointly defend the interests of Ukraine and conclude a long-term contract before the commissioning of these gas pipelines, as suggested by the European Commission,” notes Karel Hirman. And he continues: “But in any case, Ukraine needs to unbundle the gas operator, increase gas production and reduce energy consumption through energy efficiency.”.
The SAGSUR expert mentioned the statement of German Chancellor Angela Merkel about the need to maintain transit through the territory of Ukraine after the launch of Nord Stream 2. “Now Ukraine has received a lot of concrete support from the European Commission. Therefore, it must now defend its interests within the framework of a new long-term agreement on conditions that will benefit it and that will comply with EU rules, ”Karel Hirman said..
“In Lithuania, No One Will Be Against US Sanctions”
Meanwhile, the countries adjacent to the Baltic Sea are closely following the reaction of companies against which US sanctions may be imposed if they continue to work on the construction of Nord Stream 2. Economic observer of the Delfi.lt portal Edgaras Savickas recalls that the Lithuanian Foreign Ministry has repeatedly stated that it considers Nord Stream 2 to be a Russian geopolitical project aimed at weakening Ukraine politically and economically.
“With regard specifically to US sanctions against companies participating in Nord Stream 2, I did not hear any comments from our Foreign Ministry, but they said that the European Union was not going to impose sanctions on the executors of this project. And Lithuania itself cannot impose such sanctions, because our legislation does not provide for the possibility of sanctions against legal entities, ”explains the interlocutor of the Russian service of the Voice of America. “But of course, if such sanctions are imposed by the United States, then, given our attitude towards Nord Stream 2, I think no one in Lithuania will be against these sanctions,” he adds..
Lithuania does not receive Russian gas through the first branch of the Nord Stream, and after the commissioning of a terminal for receiving American liquefied natural gas in Klaipeda, the country’s dependence on Gazprom’s supplies decreased. The terminal is now owned by the Norwegian company Hoegh LNG, but the Lithuanian government intends to gradually buy it out. “We believe that this is a profitable project that will last for many years to come,” notes Savickas. – As far as I remember, after the terminal started operating, the gas price in Lithuania decreased by 30 percent. Then it changed depending on the situation on the gas market, but the simple economic logic is that if you have several suppliers of something, then mechanisms of competition begin to operate, and you have the opportunity to choose the best option “.
“The loss of the American market is worse than the refusal to build Nord Stream 2”
Poland has repeatedly expressed its disagreement with the construction of Russian gas pipelines along the bottom of the Baltic Sea. Economic analyst from Gdansk Krzysztof Szczepanek in an interview with the correspondent of the Russian service of the Voice of America, he stressed that Poland also considers this project to be political. “If we were talking about economic benefits, it would be cheaper to leave the Yamal-Europe gas pipelines through Belarus and Urengoy-Pomary-Uzhgorod through Ukraine. And if it is necessary to make an “alternative pipe”, then it would be much more profitable to lay it not across the sea, but as the “Amber” project – through Estonia, Latvia, Lithuania, Poland and further to Western Europe. And so it turns out, as one well-known politician said: “energy is not an economy, but geopolitics,” the Polish expert notes..
Is Nord Stream 2 an EU and German project? Dissonant voices in Europe
In Poland itself, according to Krzysztof Szczepanek, not a single large company participates in the implementation of Nord Stream 2, “I counted five European companies manufacturing pipes for the gas pipeline. There are no suitable manufacturers in Russia, and all European manufacturers are associated with North America. I would not dare to say unequivocally that sanctions will necessarily be imposed, but it is safe to assume that America has such an opportunity. Because all manufacturing companies have great contacts with the American side, and I think that the loss of the American market for them will be much worse than the losses associated with the refusal to build Nord Stream 2, ”sums up Krzysztof Szczepanek.