Friday, August 6, 2021

Nord Stream 2: will Gazprom start blackmail manoeuver to bypass EU regulation?

 While an agreement on the completion of the contentious pipeline has been found some energy and geopolitical observers spot ominous signs of suspicious shortening of gas.

While there is no more reasonable doubt about the imminent completion of Nord Stream 2 EU law requires unbundling, meaning: gas producer and pipeline operator must be dissociated. However both, producer and pipeline operator, are ultimately Gazprom-owned.

Experts see foul play of Gazprom to obtain an exemption, writes BILD:

Are millions of Germans threatened by a cold winter because Russia's ruler Vladimir Putin is using his natural gas as a weapon against us?

The dispute over the Russian gas pipeline Nord Stream 2 is escalating dramatically: There are increasing signs that the Kremlin is putting the pistol on Germany's chest so that the pipeline can start operating.

The status today: Nord Stream 2 AG - a wholly owned subsidiary of the Russian state-owned company Gazprom - wants to finish construction work on the tube this month. Shortly afterwards, Gazprom plans to route gas through the pipeline, which is to be delivered primarily to Germany, Austria and the Czech Republic.

But there is a legal catch: Nord Stream 2 cannot be launched at the moment because the legal requirements are not met.

One of these conditions is that the pipeline must be “unbundled”. This means: the operator of the pipe and the producer of the gas that is passed through must be two different companies. But they are not: Both ultimately belong to Russia's Gazprom - that breaks EU law.

A spokesman for the German Federal Network Agency told BILD that “Nord Stream 2 AG (...) had been asked to ensure a state that was compliant with the unbundling (...)”.

But Putin's state-owned company does not accept this and is suing both in Germany and the EU against the required “unbundling” - with little chance of success.

At the same time, the Kremlin appears to be making preparations to force the Nord Stream 2 permit on the more painful route. And that says: If no gas flows through Nord Stream 2, it also does not flow through the other pipelines ...

▶ ︎ The Gazprom bang on August 2nd: The company announced that it had not booked any (!) Gas transport capacity via the Polish Yamal pipeline to Germany from October onwards.

But that is vital for Germany! More than 30 billion cubic meters of gas flowed to Germany through this pipeline in 2020. Gas that is needed to heat 40 million German households in winter.

Gazprom announced that no additional capacities were booked to the west via Ukraine.

For experts, this leaves only one conclusion: Gazprom plans to use (the lack of) gas as a weapon to blackmail Germany and the EU into approving Nord Stream 2 - or to freeze in the coming winter.

Professor Alan Riley from the “Atlantic Council” think tank to BILD: “It is difficult to imagine what that could be if not an attempt at leveraging: Europe will get gas when Nord Stream 2 receives full EU regulatory clearance. Otherwise there will be bottlenecks and high prices. "

Natural gas manager Sergij Makogan, managing director of the Ukrainian state gas transport company “Gas TSO of Ukraine”, told BILD: “We share the opinion of the expert community that what is happening now is a Gazprom pressure campaign targeting all of Europe. Nord Stream 2 is almost complete, but the certification of this pipeline is by no means certain. "

He warns: "Gazprom may be hoping for an emergency certification of Nord Stream 2 when winter comes, gas prices continue to rise and the storage facilities are empty."

Empty natural gas storage facilities? Until recently, this horror scenario was considered to be virtually impossible. But the filling levels of the gas storage facilities in the countries potentially dependent on Nord Stream 2 are now at an alarming level.

A year ago, the storage tanks in Germany, Austria and the Czech Republic were 89, 87 and 89 percent full, respectively. The fill level today: only 51, 36 and 57 percent!

At the end of July, Gazprom admitted that it had reduced the amount of gas pumping in Europe's underground storage facilities, but appeased that this was no cause for concern ...

For the Ukrainian gas manager Makogan, this is part of a Russian strategy to reduce gas in the countries that will soon be dependent on Nord Stream 2.

“Despite the unusually cold winter and spring in Europe, Gazprom has significantly reduced the volume of gas transport via Ukraine. We have repeatedly offered additional transit capacities, which Gazprom did not want to book. Gazprom's deliveries to Western Europe fell by 22 percent in the first and second quarter of 2021 compared to 2019, ”Makogan told BILD.

▶ ︎ Consequence of the artificial shortage: In Europe, the gas price rose in the last twelve months from 2.68 US dollars per market unit MMBtu to 12.51 US dollars - a price increase of 4.66 times!

This shows: whether with or without Nord Stream 2 - gas from Russia is always extremely expensive for German consumers. Although supporters of the Putin pipeline have been claiming the opposite for years ...

And: If the policy in Berlin against Moscow insists on the enforcement of European law, there is a threat of a natural gas war. And since Germany is dependent on Russia, the dispute could mean a freezing cold winter for millions of Germans.

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