Ukraine Fears New Russian Gas Route
KIEV, Ukraine -- Turkey’s decision to allow Russia permission to build the South Stream gas pipeline seems to have cause a degree of panic in Ukraine.
The agreement, reached on Wednesday, could have significant implications on long-running gas negotiations between the two countries and reduce Ukraine’s bargaining power in extracting much needed price concessions from Moscow.
The South Stream pipeline would see Russian gas exported across the Black Sea to Europe, bypassing Ukraine, whose gas transit network is currently responsible for carrying 80 per cent of Russian energy exports to the EU.
The government, which currently pays around $416 per 1000 cubic metres of gas, has been trying to get Russia to give it a discount of around 40 per cent, so that it would in effect pay only $250 per 1000 cubic metres.
The South Stream deal indicates Russia’s desire to diversify away from its dependence on export routes through Ukraine.
This has been made all the more urgent following Wednesday’s signing of a memorandum of understanding between Azerbaijan and Turkey to build a new pipeline to carry Azeri gas to Europe.
Elsewhere, in a worrying precedent for Kiev, neighbours Belarus – who faced a similar predicament earlier this year – caved in to Russian pressure by selling their remaining stake in Beltransgaz to Gazprom last month.
KIEV, Ukraine -- Turkey’s decision to allow Russia permission to build the South Stream gas pipeline seems to have cause a degree of panic in Ukraine.
The agreement, reached on Wednesday, could have significant implications on long-running gas negotiations between the two countries and reduce Ukraine’s bargaining power in extracting much needed price concessions from Moscow.
The South Stream pipeline would see Russian gas exported across the Black Sea to Europe, bypassing Ukraine, whose gas transit network is currently responsible for carrying 80 per cent of Russian energy exports to the EU.
The government, which currently pays around $416 per 1000 cubic metres of gas, has been trying to get Russia to give it a discount of around 40 per cent, so that it would in effect pay only $250 per 1000 cubic metres.
The South Stream deal indicates Russia’s desire to diversify away from its dependence on export routes through Ukraine.
This has been made all the more urgent following Wednesday’s signing of a memorandum of understanding between Azerbaijan and Turkey to build a new pipeline to carry Azeri gas to Europe.
Elsewhere, in a worrying precedent for Kiev, neighbours Belarus – who faced a similar predicament earlier this year – caved in to Russian pressure by selling their remaining stake in Beltransgaz to Gazprom last month.
Sources:
Kiev Ukraine News Blog
Kiev Ukraine News Blog
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