Putin’s gas pipelines and Ukraine

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2015/09/12 • Analysis & Opinion

Article by: Vitaliy Portnikov

On December 1, 2014, during his visit to Turkey, Russian President Vladimir Putin unexpectedly announced the suspension of the construction of the South Stream gas pipeline and the launch of a new project — the Turkish Stream gas pipeline. On September 11, 2015, Turkey’s Deputy Minister of Energy and Natural Resources Sefa Sadık Aytekin announced that consultations on the implementation of the ambitious project have been frozen. In reality, this phrase means the end of the Turkish Stream due to the “mutual distrust of the parties.” Now Russia is trying to force through the second phase of North Stream (gas pipeline from Russia across the Baltic Sea to  Germany — Ed.).

When Putin announced the launch of Turkish Stream, most observers immediately commented on the project’s lack of professionalism and feasibility. This gas pipeline could never become an alternative to the Ukrainian gas transit system. It literally went nowhere. Russia required the recipients of Russian gas to build their own pipelines (!) from the Turkish border. This kind of construction was not envisioned by any Gazprom contract, but this is not something Putin wanted to hear! This is why he has been literally obsessed with the idea of “bypassing” Ukraine and why he believes this is his main lever of pressure on the Ukrainian state.

However, the gas pipeline histories also have their positive aspects. The rejection of the South Stream pipeline project turned out to be a “cold shower” for the countries that were defending this project and who were loyal supporters of Russia — Serbia and Hungary. After this development it became easier to discuss sanctions against Moscow with Budapest. And Belgrade has accelerated the process of negotiations regarding its own European integration. The Serbs and Hungarians have discovered that Putin can “drop them” at any moment.

As a result of the Turkish Stream affair, relations between Russia and Turkey and the personal relations between Putin and President Erdogan have cooled considerably. Ankara was expecting significant compromises upon reaching an agreement on the pipeline construction, but found no understanding on the other side. Greece has become another victim. Putin was negotiating with the then prime minister Tsirpas about extending the gas pipeline across the country. The Greeks were already counting dividends and beginning to view the project as an important source of money for the treasury. Given Greece’s current situation, this was very important. But nobody even informed Athens that the project was being dropped. This was also true with Skopje. The Macedonian Republic was to become an alternative route, replacing Bulgaria. Negotiations with the Macedonian government began during a politically tense period. Russia’s Foreign Ministry accused the West of trying to destabilize the situation in Macedonia with the goal of preventing the construction of Turkish Stream. But later it was through the efforts of Western mediators — the same Victoria Nuland, by the way — that the Macedonian political crisis was resolved. And no construction of anything ever took place.

The construction of a new branch of the North Stream — illusory for now — has damaged Russia’s relations with yet another of its allies in the European Union — Slovakia. Recently, during negotiations with Ukrainian Prime Minister Arseniy Yatseniuk in Bratislava, the Slovak Prime Minister Robert Fitso chose not to comment on Russia’s intentions. This means that yet another country would not be opposing sanctions. Putin is building a scaffold with his own hands.

Translated by: Anna Mostovych
Source: Radio SVoboda

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  • Vol Ya

    Ukraine will never be independent as long it is tied to Russia for natural gas
    supplies. It is crazy for Europe and Ukraine to be buying any oil and natural gas from Russia when there are plenty of other sources that are cheaper and more reliable. Buying energy from russia amounts to feeding the enemy with hard currency. This must stop now. And it can be done. It just required the political will. Lithuania has done it, it totally rid itself of russian energy imports.

    • Dagwood Bumstead

      I’m not sure whether Lithuania has TOTALLY rid itself of Dwarfstan’s oil and gas, though the LNG terminal at Klaipeda apparently has the potential capacity to handle 90% of the gas consumption of all three Baltics. As I understand it, it currently handles 25% of Lithuania’s consumption. Gazprom was charging Vilnius an extortionate price for gas, which was why the terminal was built in the first place. When the terminal entered service at the end of last year, Vilnius told Gazprom “Either you drop the price to an acceptable level or we’ll import ALL our gas from Norway.” A pipeline interconnecting all three Baltics of sufficient capacity will be ready next year and it’s a dead cert Piga and Tallinn will be using the LNG terminal for at least part of their gas consumption as well, forcing Gazprom to drop its price for them also.
      There were a lot of complaints in Lithuania about the cost of the LNG terminal when it was being discussed and during its construction, but the discount Gazprom was forced to give Vilnius has already paid for its construction so nobody’s complaining any longer. Well, apart from the dwarf, Alexei Miller of Gazprom and their crooked chums in Moscow, that is. There will be more gnashing of teeth in Moscow when Riga and Tallinn start using the Klaipeda terminal some time next year, even though the Baltics aren’t huge customers- and even more when Poland’s LNG terminal near Stettin enters service. That terminal won’t be handling the dwarf’s gas either.
      The Ukrainian energy efficiency is appallingly low and bringing that up to the EU average would put a severe dent in the dwarf’s gas and oil sales to Kyiv indeed. Yushchenko and Yulia should have made this a top priority during their watch, but they didn’t. One of the very few things Proffessor Viktor Yanukovich did right was to sign contracts with Chevron and Shell to explore the country’s shale gas deposits, and Exxon and Shell to explore the waters around the Crimea for oil and gas. The dwarf’s invasions of the Crimea and the Donbas put paid to those projects, however. He simply can’t afford Kyiv becoming independent of his oil and gas. If you’re looking for the real reasons for his invasions, they are two words: oil and gas. They are his REAL hold on Kyiv. The sooner Kyiv can say “Shove your oil and gas you-know-where” the better.

      • George Evans

        the price ame down because energy prices worldwide have collapsed..( where have you been not to understand that)…

        when prices go up..which they will.. all prices will increase( including Norway’s)…

    • George Evans

      but they are much more expensive. yoyo…

      that is the simple answer…they need it, particularly now they are broke…and have no gold left…