Gazprom Coerces Ukraine Into Peace

More recently, Ukrainian officials and politicians have been waiting for Gazprom to pay some gas and other nonsense. But there were two events. First one: Denmark surrendered to the mercy of the winner and gave permission to lay a pipeline on its territory. Second one: US President Donald Trump is no longer interested in Ukraine with its problems, Maidans, politicians, etc.

And now the government in Kiev has difficulty with the signing of gas transit.

The other day in St. Petersburg there was a working meeting between the Chairman of the Board of Gazprom Aleksey Miller and the Commissioner of the Federal Government of Germany for Gas Transit through Ukraine Georg Graf von Waldersee.

The sides discussed the issues of cooperation between Gazprom and Ukraine in the gas sphere since 2020.

Miller notified his German colleague of the conditions that the Ukrainian side is obliged to meet before Russia begins negotiations on transit. Thus, Germany will become the European lever that Gazprom will use to force Ukraine to cooperate mutually and fulfil its obligations.

And the conditions are as follows:

  1. Settling court disputes between Gazprom and Ukraine. This condition includes the mutual waiver of claims and the termination of legal proceedings between Gazprom and Naftogaz under contracts for the supply and transit of Russian gas and the restoration of the balance of commercial interests of the parties. The Antitrust Committee of Ukraine undertakes to lift the fine imposed on Gazprom for false abuse of monopoly position in the gas transit market of Ukraine and to restore the violated property rights of the company in the country.
  2. Ukraine should show its readiness for direct purchases of Russian gas from 2020 and determine the volume of such purchases. This is necessary in order to determine the capacity of the Russian gas transportation system supported by Gazprom on the border with Ukraine.
  3. As part of the implementation of the provisions of the Third Energy Package of the European Union into national legislation, Ukraine is obliged to ensure the real independence of the national regulator and to create a certified independent gas transportation operator. The deadline for the fulfilment of the condition is January 1st 2020. Otherwise, Gazprom will propose to extend the current transit contract for a transitional period taking into account the current market conditions.
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Gazprom successfully forces Ukraine into peace. Otherwise, the government in Kiev will have problems not only with Moscow, but also with German colleagues. And this will be a signal to all other European countries. Of course, the Baltic states and Poland loyal to Ukraine will find words of support, but nothing more. It is possible to understand the hysterical statements of high-ranking Naftogaz officials about Kiev’s readiness for dialogue, and calling on Russia to conclude a transit treaty, but the conditions have changed. Moscow now has every right to dictate its terms of the agreement that are fully in the interests of the Russian state.

Vladimir Karasev

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