Tuesday

2nd Jun 2020

Gazprom welcome to co-own Ukraine gas pipes, EU says

  • Gas pipes in Ukraine, inviting in Gazprom is a strategic risk, some diplomats say (Photo: Naftogaz of Ukraine)

The European Commission has said it would welcome joint control of Ukraine's EU-transit gas pipelines by Russian energy giant Gazprom.

Energy commissioner Gunther Oettinger told Ukrainian daily Kommersant-Ukraine in an interview out on Monday (4 March) that: "We can offer Ukraine a trilateral consortium which would include a Russian participant, [Ukrainian distributor] Naftogaz Ukrainy and European businesses."

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He noted: "It's your government's right to decide who should own the gas transportation system and who will run it. If Kiev decides Gazprom should have that right, why not? Gazprom is involved in other pipeline projects, some of them in EU territory."

He added that he would like to play a bigger role in Kiev-Moscow talks on Russian gas prices for Ukraine, amid an ongoing dispute which threatens to disrupt EU-bound supplies.

"We are receiving certain information and giving certain advice, but no more than that. A decision on bringing another participant into the negotiations is possible, but that is [Ukraine's] prerogative," he noted.

Brussels hopes that if Gazprom links up with Naftogaz, which transits 20 percent of EU gas consumption, it would end the kind of disputes which saw households in EU countries cut off in the winter of 2009.

It also hopes the new consortium would increase transparency and attract investment in Naftogaz' decrepit infrastructure.

The Russia-Ukraine gas business is in any case intertwined in an opaque way.

One of Ukraine's gas barons, Dmitry Firtash, by his own admission to a US diplomat in 2008, said that a Russian mobster, Semion Mogilevich, organised his first investments in the sector.

But Naftogaz pipes and storage tanks are also a strategic asset, seen by some as the basis of Ukraine's economic and political independence from Russia.

One EU diplomat told EUobserver on Tuesday that Gazprom "is an arm of the FSB," Russia's top intelligence service.

He noted: "Russia's strategic aim is, step by step, to increase its influence in Ukraine in order to pull it away from EU integration and to make it join the Customs Union [a Russia-dominated trade bloc]. If it becomes a co-owner of Naftogaz, there is a risk that its influence in Kiev will grow."

He added that Oettinger's remarks might have been designed to "provoke" Ukraine into revealing its plans on energy reform, after inconclusive EU-Ukraine talks on the subject.

Meanwhile, the commissioner is trying to shepherd construction of a gas pipeline from the Caspian Sea directly to EU countries, bypassing Russia and Ukraine in a bid to reduce dependence.

Azerbaijan is to be the main supplier.

But Oettinger said on Monday that Turkmenistan, whose gas would increase the project's capacity to a more important level, is unlikely to get on board. "I am sure that Turkmen gas definitely will not come to Europe this decade," he said.

For its part, Russia, at an event in December in Anapa on the Black Sea coast, began construction of South Stream, a competing project to the EU's Caspian scheme.

Its CEO, Dutch executive Marcel Kramer, said it will "transport the first gas by late 2015."

Oettinger at the time declined Kramer's invitation to Anapa.

He noted in his interview on Monday that "We [EU institutions] … are not putting money or other support into the [South Stream] consortium."

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