Thursday, January 15, 2015

#Moscow Puts an Ultimatum to the #EU


#Moscow Puts an Ultimatum to the #EU 


Moscow puts the EU an ultimatum to agree to participating in the "Turkish stream." However, Europeans are in no hurry to agree - for some the transit of Russian gas via Turkey looks more dangerous than through Ukraine.

After the end of last year, Vladimir Putin announced the rejection of the South Stream pipeline. Instead he favors Turkey, the European Commission, put a spoke in the wheel of the project, began to stir up this change. Prospects of getting Russian gas transit through Turkey (thereby give tools of pressure on Ankara on the EU) seriously disturbed by this is Brussels, so now European officials are trying to look for options to renew the cancelled South Stream. They were joined by the potential of the country then - where transit was to have been primarily through Bulgaria (who did not want to lose the huge profits in the hundreds of millions of dollars).

Trying to find a compromise with Russia, The new EU Energy Commissioner Maros Shevchovich, arrived in Moscowon January 14th. He met with the head of Gazprom Alexei Miller, and, according to him, From him he heard "great news." Miller did not discuss with the European official conditions for resuming South Stream, but simply conveyed to him it was one of two positions of the Russian's side plan: to stop by 2020 gas transit to Europe through the territory of Ukraine and let all this gas travel through Turkey. The Turkish "Pipeline" Stream is the only route by which gas can be delivered at the rate of 63 billion cubic meters of Russian gas going now through transit in Ukraine. No other choices were mentioned.

Our European partners informed us of this, and now their task is to create the necessary infrastructure to the border of Turkey and Greece, "- said Alexey Miller. And the time needed to create this infrastructure is running out, at best a few years left - continued the Russian official. - This is a very tight schedule for them. In order to meet these deadlines, the work on the construction of new gas pipelines in the EU should be started no later then today. Otherwise, these volumes of gas will not be available in other markets.

Europeans do not want to build pipelines, and not just because they do not have the money for it - it's that they believe that exposing themselves to this ultimatum, is just the head of Gazprom trying to play poker with them. Firstly, there are no "other markets" in the western direction from Gazprom not.Secondly, if Europe refuses to build a hub in Greece, Gazprom will suffer from to, not only them. A Russian gas monopoly simply violates existing contracts for the supply of "blue fuel". According to them, Moscow is obliged to deliver certain volumes of gas to the EU, and the point of delivery, according to Shevchovicha, "is not the border with Turkey."

Theoretically, of course, these points can be transferred, but there should be created some technical capabilities just in case. And if at the time of failure of the Ukrainian transit and the completion of the Turkish stream in Greece there is stiil not to be a hub created, capable of pumping 50 billion cubic meters of gas, it is not the guilt of Russia delaying and disrupting the deliveries from Gazprom. Therefore, indicated Shevchovich, if the actions of the Gazprom "may damage the image of the company as a reliable supplier."

In Moscow, it was explained that the supply disruptions will not allow if "Contracts between" Gazprom "and its consumers will be executed in full. And never did, "Gazprom" or the Russian Federation violate its obligations. The decision to postpone the volume of gas and the gas pipeline construction on the new route we removed risks due to unreliable countries that are creating problems in the supply of European consumers ", - said Russian Energy Minister Alexander Novak. Blame them.

Authorities themselves, of an "unreliable country", (I'll let you Guess), called the principles of Moscow irrational. Saying they are "Punishing Ukraine for not wanting to live in the" Russian world "Russia is ready to put the pipeline even over the North Pole. Policy of deep complexes "- says the speaker of the Ukrainian Foreign Minister Yevhen Perebiynis. However, there is not the complexes, and reliability. Peculiar attitude of Ukraine to its international obligations has led to the fact that today even a pipeline across the North Pole looks safer than to let the gas transit through Ukrainian territory.

So, now the Ukrainian authorities are trying to replace those that buy Russian gas pumping out it from underground storage. If in the beginning of December there were about 14 billion cubic meters of "blue fuel", now - about 10.5. Ukraine understand, of course, you can - money to buy Russian gas (even with the hundred dollar discount) in Kyiv not. Foreign exchange reserves of the country are melting rapidly, and by the end of December 2014 they decreased by 24.4% compared with the previous month, reaching a record low for the past 10 years, 7.5 billion. Dollars. However, Gazprom officials have warned that such savings before a fall - pumping gas from storage, Kiev thus creates risks for European consumers. Winter peak gas consumption falls at the end of January and February, and if at this time, a heavy frost and gas reservoirs in western Ukraine will be empty, the European gas may not be enough.

Moreover, even if Europe manages to miraculously survive the cold season with a minimum reserve of gas in storage, then the next heating season, these repositories will still need to fill through the purchase of Ukraine Russian gas. At the same time Alexander Novak said that he sees no relevance in the new special arrangements for the supply of gas to Ukraine after the month of March, implying a discount on the price of the contract. Of course, given the current situation with the cost of oil, which is tied to the price of gas Ukraine in the summer it will be sold for 250-270 dollars, but the price and the Ukrainian authorities can not draw. The country's economy continues to dive down, and if foreign exchange reserves will melt at the current pace, then six months later, nothing was left.

That is why Moscow is trying to convey to the EU the idea that it is better let the Europeans fork over Greek hub now than live under the sword of Damocles Ukrainian transit (in fact an alternative to Russian gas, the EU is not). Source.

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