Energy

Russian-Ukrainian Gas Deal is a Trilateral Victory

Vladimir Putin Emmanuel Macron Angela Merkel Volodymyr Zelensky
Vladimir Putin, Emmanuel Macron, Angela Merkel and Volodymyr Zelensky, the leaders of Russia, France, Germany and Ukraine, attend a summit in Paris, December 9, 2019 (Bundesregierung)

Russia and Ukraine have agreed to secure the flow of natural gas to Europe for the next five years. A deal between the two countries satisfies the economic needs of all three parties involved. Russia guarantees the export of its gas, Ukraine continues to benefit financially from transiting the gas, and the EU receives a steady supply of gas for the immediate future.

Gazprom, the Russian gas monopoly, will pipe 65 billion cubic metres of gas into Europe in 2020. The amount will fall to 40 billion over the next four years. The agreement mentions the possibility of extending the contract by another ten years upon maturity.

Ukraine will receive up to $7 billion in transit fees, which would be around 5 percent of its national budget.

An agreement has not (yet) been reached on direct gas supplies to Ukraine. For the time being, it only stands to benefit financially.

Naftogaz, the Ukrainian gas company, will also receive $2.9 billion from Gazprom in overdue transit payments following an arbitration court ruling in Sweden. In return, Ukraine has agreed to drop $12.2 billion in additional legal claims. Read more “Russian-Ukrainian Gas Deal is a Trilateral Victory”

Nord Stream Sanctions Are No Way to Treat European Allies

American president Donald Trump speaks with German chancellor Angela Merkel at the G20 summit in Hamburg, July 6, 2017
American president Donald Trump speaks with German chancellor Angela Merkel at the G20 summit in Hamburg, July 6, 2017 (Bundesregierung)

Senators in the United States have approved sanctions against companies that are involved in building the Nord Stream 2 pipeline between Russia and Germany.

The sanctions, which President Donald Trump has yet to sign into law, are a last-ditch attempt to halt the pipeline’s construction, which the Americans argue will only increase Europe’s dependence on Russian gas and hurt Ukraine’s position as a transit nation.

They’re not wrong, but placing sanctions on allies is no way to go about it, especially when they have no alternative. Read more “Nord Stream Sanctions Are No Way to Treat European Allies”

The Trans-Anatolian Pipeline, Explained

Welded pipes of the Trans-Adriatic Pipeline are lowered in northern Greece, November 2016
Welded pipes of the Trans-Adriatic Pipeline are lowered in northern Greece, November 2016 (TAP)

After four years of construction, the Trans-Anatolian Natural Gas Pipeline (TANAP) has started pumping gas into Europe.

TANAP is part of Europe’s Southern Gas Corridor, connecting the South Caucasus Pipeline (completed) with the Trans-Adriatic Pipeline (still under construction). It aims to transport natural gas from Azerbaijan all the way through to Italy, where it flows into the European market.

Once the system is fully operational, it should be able to pipe 16 billion cubic meters of natural gas into Europe per year. Read more “The Trans-Anatolian Pipeline, Explained”

China-Russia Gas Pipeline Should Concentrate Minds in Brussels

The Power of Siberia natural gas pipeline in Russia's Far East
The Power of Siberia natural gas pipeline in Russia’s Far East (Gazprom)

Russia has started piping gas to China through a new pipeline, called Power of Siberia. After five years of construction, it will be able to send up to 38 billion cubic meters of gas to China per year.

The pipeline marks a reorientation of Russian energy policy away from the European market, which should give European policymakers some concern. Read more “China-Russia Gas Pipeline Should Concentrate Minds in Brussels”

Poland Needs EU Support to Meet Climate Goals

Turów Power Station in Bogatynia, Poland, December 3, 2009
Turów Power Station in Bogatynia, Poland, December 3, 2009 (Wikimedia Commons)

Poland will not be able to meet the EU’s 2050 zero-emissions target without additional funds. In an interview with the Financial Times, the country’s chief energy advisor, Piotr Naimski, argues that the European Union needs to take its particular circumstances into account.

Poland’s extreme reliance on coal makes the goal to reduce net emissions to zero a tall order. Coal generates about 80 percent of Poland’s electricity. It also curbs its reliance on Russian energy, which is of geopolitical significance.

There is a political consideration as well. Mining unions are still strong in Poland. The industry has long provided well-paying jobs with a high degree of stability. Miners enjoy special retirement provisions. This makes them a powerful voting bloc. Read more “Poland Needs EU Support to Meet Climate Goals”

Germany’s Nord Stream Climbdown Should Put Ostpolitik to Rest

Vladimir Putin Angela Merkel
Russian president Vladimir Putin speaks with German chancellor Angela Merkel in Moscow, May 10, 2015 (Kremlin)

Frederick Studemann argues in the Financial Times that Germany’s Ostpolitik breathes its last in the Nord Stream 2 pipeline controversy.

Germany’s allies in Central European and North America have for years argued against the extension of the Baltic Sea pipeline, arguing — correctly — that it is a political project for Moscow. It doesn’t need the extra capacity. It wants to cut its dependence on Russia-wary transit states in Eastern Europe, most notably Ukraine. Read more “Germany’s Nord Stream Climbdown Should Put Ostpolitik to Rest”

Dutch Caribbean Caught Up in ConocoPhillips-Venezuela Oil Dispute

A cruise ship moored in Willemstad, Curaçao
A cruise ship moored in Willemstad, Curaçao (Shutterstock/Galina Savina)

The Dutch Caribbean have been caught up in a legal dispute between the American oil company ConocoPhillips and the government of Venezuela.

A judge has allowed Conoco to seize Venezuelan-owned and -operated refineries on the islands in order to collect $2 billion in compensation awarded by the International Chamber of Commerce for the 2007 nationalization of Conoco assets in the socialist-run country.

The seizure poses a “potential crisis” to the economy of Curaçao, Prime Minister Eugene Rhuggenaath has told Reuters. The Isla refinery, which processes 335,000 barrels of oil per day, accounts for a tenth of the island’s economy. Read more “Dutch Caribbean Caught Up in ConocoPhillips-Venezuela Oil Dispute”

Poland Launches Legal Challenge to Nord Stream 2

The skyline of Warsaw, Poland
The skyline of Warsaw, Poland (Unsplash/Alexey Topolyanskiy)

Poland’s antitrust watchdog has begun legal proceedings against Gazprom and the five European companies that are its partners in Nord Stream 2. The regulator alleges that completion of the Baltic Sea pipeline would inhibit competition.

EurActiv reports that the companies — Anglo-Dutch Shell, Austria’s OMV, Switzerland’s Engie and Germany’s Uniper and Wintershall — face fines of up to 10 percent of their annual turnover. Read more “Poland Launches Legal Challenge to Nord Stream 2”

Gas Exploration Opens New Doors in Nicosia

Nicosia Cyprus
The sun sets on Nicosia, the capital of Cyprus (Shutterstock/Iv Nikolny)

Located between Europe and the Middle East, Cyprus has historically been of strategic significance to powers on either side of the Mediterranean Sea. The discovery of natural gas off its shores has raised the island’s geopolitical profile — and might help it overcome communal tensions.

Cypriot waters are estimated to contain between 140 and 220 billion cubic meters of gas with an approximate value of €38 billion.

Exploration should spur economic growth and could make it easier for internationally-recognized Greek Cyprus and Turkey to hash out a compromise for the future of the island. Read more “Gas Exploration Opens New Doors in Nicosia”

Russian Gas Pipeline Triggers Transatlantic Spat

German party leaders Sigmar Gabriel and Angela Merkel walk to a news conference in Berlin, June 29, 2015
German party leaders Sigmar Gabriel and Angela Merkel walk to a news conference in Berlin, June 29, 2015 (Bundesregierung)

An Americans sanctions bill that explicitly mentions the Nord Stream 2 pipeline has set off alarm bells in Berlin and Vienna.

In a panicky joint statement, the foreign ministers of Germany and Austria urge the United States not to impose “illegal extraterritorial sanctions” on the European companies that are building a pipeline under the Baltic Sea.

Sigmar Gabriel, a social democrat, and Sebastian Kurz, a conservative, warn that such penalties could affect transatlantic relations in a “new and very negative way” and “diminish the effectiveness of our stance on the conflict in Ukraine.”

European countries and the United States are currently united in condemning Russia’s annexation of the Crimean Peninsula and its support for an insurgency in southeastern Ukraine. Both sides have imposed sanctions on Russia. Read more “Russian Gas Pipeline Triggers Transatlantic Spat”