Ukraine’s last revenge: gas transit to Europe hangs in the balance

MOSCOW, September 12 — PRIME, Oleg Krivoshapov. The flow of Russian gas to Europe is steadily declining. After the suspension of the Nord Stream, in fact, the last thread remained – transit through the Ukrainian GIS Sudzha. Thus, Europe does not have guarantees of stable supplies at reasonable prices, although there are reserves. At the same time, European politicians demonstrate a clear unwillingness to solve the problem with the help of Russia, which has repeatedly proved its reliability in this matter. And what will the EU get if, for example, the transit of Russian gas through Ukraine is completely stopped?

ONLY ONE LEFT

After Nord Stream supplies were suspended, only one large gas pipeline remained, through which natural gas is delivered directly to Europe. And this route, taking into account the current situation, looks more and more vulnerable.

Energy carrier transit through Ukraine has already significantly decreased this year due to the decision of official Kyiv to stop pumping volumes through the Sokhranivka gas measuring station (GIS), and since mid-May supplies have been less than 40% of the contracted volumes. The second entry point to the GTS of Ukraine, the Sudzha GIS, remains functional, through which, according to Gazprom, approximately 39-42 million cubic meters of gas per day is pumped.

Experts interviewed by the American Bloomberg agency admit that deliveries through this point will stop as the fighting in Ukraine drags on and tensions between Russia and Europe escalate. Stopping the second GIS is not ruled out in the event of physical damage to the infrastructure or a purely political decision by the Ukrainian authorities, similar to the one taken in relation to Sokhranivka, which allowed, based on contractual obligations, about a quarter of all Ukrainian transit.

However, in the event of such a development of events, the transit of natural gas through Ukraine will completely stop. And this will lead to a reduction in the current total pipeline exports from Russia to Europe – about 80 million cubic meters per day – by half, warns Bloomberg. And then Gazprom will supply natural gas through one section of the Turkish Stream gas pipeline to several European countries that have not severed business ties with Russia.

FIRST VICTIMS

Russian President Vladimir Putin has made it clear that energy supplies to those countries that try to artificially limit the cost of Russian volumes will be stopped.

What will this mean for a united Europe? First of all, the most vulnerable consumers in the EU landlocked countries, whose dependence on pipeline supplies is objective and unconditional, will suffer first. And if Hungary, which consistently defends its interests in the energy sector thanks to the will of the political leadership, has the opportunity to receive the necessary volumes through the Turkish Stream, then countries such as Slovakia and the Czech Republic are in a much less favorable position. In them, as in almost all of Europe, there are problems with the provision of energy. For example, in August, due to high electricity prices, the production of primary aluminum at the Slovak enterprise Slovalco, controlled by the Norwegian Norsk Hydro, was already stopped. Stopping the supply of gas from Russia, which is in transit through Ukraine, will significantly exacerbate the problems.

The formal position of the EU leadership boils down to the fact that each country of the association should be ready to share the accumulated volumes of “blue fuel” with its neighbor. However, this view of mutual assistance is not understood by everyone in Europe. Thus, Poland has openly and unequivocally stated that it does not intend to share its gas.

Thus, if the principle voiced by Brussels does not work, then stopping Ukrainian transit risks becoming a serious test, at least for the Czech Republic and Slovakia. If Prague and Bratislava manage to stop the problem by obtaining some concessions from their EU partners, then this will most likely lead to a general reduction in gas reserves in Europe.

BEARD TAX

At the same time, European business, which is not interested in restrictions on fuel supplies from Russia, is simply paralyzed, says Konstantin Simonov, director general of the National Energy Security Fund (NESF). According to the expert, the political atmosphere in Europe now is such that representatives of business circles, when trying to object to the discourse imposed by the Brussels apparatus, risk gaining fame as “Kremlin agents.”

At the same time, sanctions are pouring from the bureaucratic corridors of Brussels, as if from a cornucopia – it seems that they were either prepared in advance or invented on the fly, no longer knowing what to cling to.

“And let’s also introduce a tax there, on the beards of Muscovites,” Leonid Grigoriev, professor of the Faculty of World Economy and World Politics of the Department of World Economy of the Higher School of Economics, ironically. “And they are shaved, it’s a pity. Time has passed. Let’s do something else.”

He draws attention to the fact that the problem of impeding the supply of Soviet and then Russian gas to Europe has existed for half a century: “50 years without stopping, then one thing, then another.”

At the same time, the model by which Gazprom works with Europe was developed in the 1980s, says Grigoriev. “It was developed by great mathematicians,” says Professor Grigoriev. “It minimizes gas flaring along the road. That is, let’s say, Turkmen gas has always been supplied under a contract to Ukraine, but in fact it was burned in the Urals so as not to waste too much “on the road” This is a huge system made “for Europe”.

In turn, in Europe, during the construction of gas pipelines from Russia, the economic approach prevailed. For example, one country had to nationalize a leading American compressor manufacturer. Yes, and Europe received cheap Russian gas, no matter what modern Western politicians say. Relatively recently, in 2020, it cost $140 per thousand cubic meters, and in some periods the prices were below $100. The current quotes then looked no less fantastic than these figures now.