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Ukraine and Poland, a bloc born of gas in the face of German hyper-leadership

2021-08-30T13:41:08.306Z


The courts resolve the misgivings generated by the Russian Nord Stream 2 gas pipeline, which favors German interests to the detriment of those of the East


The Nord Stream 2 gas pipeline is practically finished.

Its certification is the last barrier for Russian gas to flow through its pipelines directly to Germany, a country that will assume the passage of much of this key resource to the European Union.

The initiative, which some member countries do not like, will have profound repercussions on the political board left by Angela Merkel, and some of them have found an ally in Ukraine against German interests.

A long-term game where Kiev could find its place on the block.

"Ukraine will insist that the Russian gas pipeline operate only in accordance with European law," says Svitlana Zalishchuk, international affairs advisor to the CEO of the Ukrainian gas company Naftogaz.

“European rules prevent Nord Stream 2 from being a manipulation tool for the Kremlin.

That is why the certification will be an important test for the European Union;

see if it is able to protect its own rules when there is a lot of money involved, "he adds.

More information

  • The Nord Stream 2 gas pipeline widens the struggle between Russia and the West

  • Germany clashes with EU over Russian Nord Stream 2 gas pipeline

The battle for Nord Stream 2 is being settled in court, where Poland and Ukraine could delay their start-up for many months. There are two open fronts, both with precedents in favor of Kiev: the principle of European solidarity and the EU directives that regulate the liberalization of the gas and electricity market, known as the third energy package. The first refers to the victory of Warsaw over the Opal case in the Court of Justice of the EU, which in July overturned the permission of Brussels to Berlin to exploit this pipeline to the maximum, since it put the energy security of Poland and Slovakia at risk by reduce the passage of gas through its territory. Regarding the third energy package,The High Court of Dusseldorf has rejected the request of the Russian Gazprom not to be applied to the great maxim of this antitrust legislation: the production of gas and its distribution must be separated to promote competition and allow access to third parties.

Price increase

"Germany will have cheaper gas with Nord Stream 2, but the other countries will pay more and their production will be less competitive, that is not supportive," warns Sergiy Makogon, CEO of the Gas Transmission System Operator of Ukraine (TSOUA).

However, the company is confident that removing Gazprom's monopoly on Nord Stream 2 will lower prices: "It is not the only gas producer in Russia, there are a hundred that can export to Europe, like Novatek."

However, this opinion is not shared by Konstantin Simonov, director of the Russian National Energy Security Fund.

"European companies can buy it even in the Leningrad region if they want, but Russian law states that only from Gazprom because it has a monopoly on exports."

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The operation of the gas pipeline seems safe for all experts, the question is at what volume.

According to Simonov, "it is very possible that justice limits it to 50%", which would maintain the route through Ukraine, just what Vladimir Putin promised in his last meeting with Merkel.

However, in the opinion of Georg Zachmann, a Bruegel researcher, "Gazprom has a high gas quota and its pressure on the authorities will be very high" to be able to use it to the maximum.

That is why he believes that "Europe has to get Ukraine into the game."

The edges are both political and economic.

“Although it may seem the other way around, it is not true that gas will become more expensive for Kiev;

It doesn't depend on how close you are to the seller, ”says Willem Coppoolse, who has worked for three decades in eastern markets for giants like EDF, GDF Suez and Naftogaz.

“Since the sector was liberalized, the price is set in the hubs of the European market.

If Russia does not sell gas to Ukraine, it will buy it back from others, but with the current volatility it is not so important ”, he says before estimating that it could be about 20 cents of difference, while natural gas has risen from seven to 45 euros / MWh in one year.

New scenario

In any case, Ukraine has found its place in the new scenario.

"We have the largest gas warehouses in Europe," stresses Makogon.

Its 31 billion cubic meters of gas (bcm, in English) make the country a strategic reserve for the bloc in the face of supply cuts and price swings.

In addition, the nation is a perfect fit with Poland, which seeks energy independence from Germany with access to gas pipelines from Turkey and Bulgaria, and in return could offer Kiev liquefied natural gas that reaches its ports from all over the world. world.

In other words, an alternative political-economic bloc would thus be consolidated in eastern Europe.

More information

  • OPINION |

    Germany goes alone

  • Nord Stream 2 deal raises blisters in Ukraine

In fact, the foreign ministers of Ukraine and Poland recently denounced the agreement between Washington and Berlin to unblock the gas pipeline because "it allows Russia to deepen the disagreements within NATO and the EU." A set of pacts that the Naftogaz adviser also highlights: "The US administration has limited sanctions to try to achieve an alliance with Berlin that counteracts China," says Zalishchuk.

“If Ukraine ceases to be a transit country, Russia will become more aggressive in the east. The pipelines are only 70 kilometers from Donbas ”, they warn from TSOUA. In fact, the confrontation with Russia also deprives Kiev of its main gas reserves, an economic alternative to the 3,000 million dollars that it will lose if it is not a transit area. “The potential deposits of the Black Sea could turn Ukraine into a gas exporter; but Russia prevents its extraction after the illegal annexation of Crimea ”, denounces Zalishchuk.

What is unappealable is that the European Union depends on Russian gas. According to Eurostat, the block consumed 394 bcm in 2020. Of this figure, 43% was imported from Russia compared to 13% produced in the block. In addition, gas has become the main pollutant source due to the European Green Deal, since it was prioritized to eliminate coal and nuclear energy. "20 years ago Gazprom did not have as much weight in Europe," says Coppoolse, although Simonov removes iron: "Russia has been exporting gas to Western Europe for 50 years, when it was our ideological enemy, and not once has the tap been turned off." The exceptions to this were the

2006 and 2009 gas

wars

with Ukraine, which left parts of Europe without supplies in winter.

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Source: elparis

All news articles on 2021-08-30

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