There were
signs of a third gas supply crisis between Russia and Ukraine as Gazprom
restated on March 3 that the Russian gas monopoly “has begun the procedure of
termination for contracts with Naftogas Ukrainy.”
Gazprom
spokesperson Sergey Kuprianov tried to reassure European consumers, telling RBC
newswire that the Russian company would not stop gas transit through Ukraine in
the nearest future. “If it were the case, we would have said that directly”, he
said, asked whether the beginning of Naftogas contact termination procedure in
Stockholm arbitration would mean an immediate halt of transit through Ukraine.
The
Stockholm arbitration court ordered Gazprom this week to pay more than $2.5
billion to Naftogaz.
The
European Union is concerned that the latest spat between Moscow and Kiev may
lead to a supply cut to Europe as in 2006 and 2009 when Moscow turned off the
tap due to a similar dispute.
“It’s
pretty serious,” Dimitar Bechev of the University of South Carolina’s Center
for Slavic, Eurasian and East European Studies, told New Europe in an interview
at the Delphi Economic Forum on March 3 where a number of energy experts have
gathered for wide-ranging discussions. “It’s, of course, important to see how
long it goes, because the pervious two crises went on for several weeks.
Secondly, it will be a test case for how much resilience there is in the system
because the Commission, and the EU as a whole, has been mandating to the Member
States to build up storage capacity and contingency plans in case of a gas
crisis. So we will see what the downstream counties now have to do. But if it
lasts for at least a week, then it will be event on the scale of what happened
in 2006 and 2009,” Bechev said.
He noted
that Russia has increased its gas deliveries through Russia’s Nord Stream to
Germany and Blue Stream to Turkey, which is a “compensatory move” by Gazprom.
“Many of
the countries in Central and Eastern Europe now have interconnectors so they
can import gas to compensate for the shortfall, but they can bring Russian gas
from the West so this is going to happen as well. Ukraine can import from
Slovakia thanks to interconnectors… ultimately some of the gas will find its
way to the countries that are now cut off,” Bechev said.
European
Union Commission Vice President for Energy Union Maroš Šefčovič was quoted as
saying in a statement that the EU is “ready to steer a trilateral process
which, in the past, already proven to be effective in situations of disagreement.”
“I think
they’ll try to minimise the negative fall out in commercial terms,” Bechev told
New Europe. “Despite the political tensions, Gazprom has remained a reliable
supplier. I remember in the winter of 2013-2014 there were talks between
Naftogaz and Gazprom and the European Commission stepped in as a mediator to
ensure that there wouldn’t be another disruption. And now, several years down
the line, we’re back to square one despite the kind stability that lasted for a
couple of years,” he said.
Gazprom argued
in a press statement, “the Stockholm arbitration, following double standards,
has taken an asymmetrical decision regarding the supply and transit contracts
with Naftogaz Ukrainy.” The continuation of contracts for Gazprom is
economically unreasonable and not beneficial, the Russian company said.
Gazprom
Chairman Alexey Miller said earlier “Gazprom is forced to immediately initiate
the procedure of termination for gas supply and transit contracts with Naftogas
as a result of the Stockholm arbitration.”
Bechev
noted that “those arbitration cases are quite common, it’s kind of a standard
commercial practice, Gazprom has seen a lot of them in various issues and
different companies, as well as trading partners, but obviously Ukraine is a
different kettle of fish because the political element is built in.”
The role of
Ukraine as a transit country for Russian gas supplies to Europe will change
after the current transit contract between Gazprom and Naftogaz Ukrainy expires
on December 31, 2019.
“There is a
cutoff date at the end of 2019, when the transit agreement expires. We knew
that at some point Russia will try to eliminate the Ukrainian route once it
doesn’t have the legal obligation,” Bechev said. “In other words, it could have
waited to do it in a smooth way without causing as much trouble because
consumer countries have factored in the expectation that Ukraine won’t be the
main transit route and there will be changes after 2019.”
https://www.neweurope.eu/article/russia-ukraine-gas-crisis-3-0/