Page 5 - FSUOGM Week 34 2021

FSUOGM COMMENTARY FSUOGM

Nord Stream 2 continuing to transit Europe. The Gas Trans-
At a news conference following talks that lasted mission System Operator of Ukraine (GTSOU)
almost three hours, Merkel listed the issues that told bne IntelliNews in an exclusive interview
the two leaders had discussed that highlighted that Ukraine would decommission its pipeline
the depth and breadth of the relationship she system if Russia could not provide sufficient vol-
has built up over the years that touched on most umes of gas in transit to make the system eco-
of the world’s major international issues such as nomically viable.
Afghanistan, Syria, Libya and climate change The US has also opposed the construction of
where Germany has been seeking to rope Rus- Nord Stream 2 as it seeks to boost its exports of
sia into the international efforts to solve these LNG to Europe, but the Biden administration
problems. dropped its objections in July, admitting the
While Merkel admitted that German-Rus- pipeline was a fait accompli.
sian relations have had their ups and downs she
emphasised that she thought it was important to Afghanistan
maintain the dialogue between not just Berlin While the two leaders discussed the situation in
and Moscow, but between Russia and Europe as Afghanistan, nothing concrete was proposed as
a whole. the situation remains chaotic and the evacuation
High on the agenda was gas supplies from effort is still underway. However, Putin took
Russia to Europe. Merkel has drawn flak for advantage of the drama to harp on his favourite
pushing through permission to build the Nord theme and reject the “unipolar” approach to for-
Stream 2 gas pipeline that allows Russia to cut eign relations.
out Ukraine from its gas deliveries to Europe and Putin called on the global community to pre-
is due to be completed next week. vent the “collapse” of Afghanistan following the
Putin said there were just 15 kilometres left Taliban’s takeover there, warning it was “impor-
to complete the pipeline. He also said Russia tant to prevent … terrorists” entering neigh-
planned to fully comply with its obligations on bouring countries, including under the guise of
gas transit via Ukraine. being refugees.
Merkel has been pushing for a face saving He also criticised the “irresponsible policy” of
solution where Russia continues to route some imposing “outside values” on the country.
of its gas deliveries via Ukraine after the current The US withdrawal has considerably bol-
transit deal expires. stered Russia’s role in Central Asia as it has
Gazprom signed off on a new transit deal at become the guarantor of security in the region.
the last minute in December 2019 that commits Russia has a military base in Tajikistan and has
the Russian gas giant to send 40bn cubic metres already moved troops and weapons up to harden
via Ukraine’s Druzhba pipeline until 2024. There the Tajik border. Russia has also begun a month
is an option to extend the deal for another ten of military exercises in Uzbekistan to ensure
years after it expires. security in that country as well.
Putin reiterated that Russia has no objection Both Uzbekistan and Tajikistan are mem-
to routing some gas via Ukraine, but said it was a bers of the Shanghai Cooperation Organisation
question of volumes. Europe’s Green Deal comes (SCO) that is led by China and Russia, which
into effect next year that will lead to a reduction includes a security mandate. However, the
in the use of fossil fuels and is expected to impact organisation has largely been concerned with
Russia as the demand for gas will fall. economic integration in the region and both
He said Moscow was ready to send gas via its China and Russia are looking at expanding their
neighbour even after 2024 but Russia needed to business ties with Afghanistan that has risen in
understand the scale of demand for its fossil fuel importance in recent years as it represents a gate-
first. way to the markets of Southeast Asia – Pakistan
"And for this, we need to get an answer from and India in particular – for the Central Asian
our European partners on how much they are republics.
ready to buy," Putin told the press conference. The US withdrawal from Afghanistan has
"We cannot sign a transit contract if we don't also seriously unsettled its other allies that have
have supply contracts with our consumers in been depending on Washington for security in
Europe." the face of Russian aggression, Ukraine amongst
The European gas market is eagerly awaiting them. The US abandonment of the Afghan
Russian flows via Nord Stream 2 as European gas government came as a shock in Kyiv, which is
prices have reached record highs due to a com- now questioning US support for its fight against
bination of high demand following a cold winter Russia.
and a hot summer that has seen gas storage fall to Merkel was due to fly on to Kyiv on August
unusually low levels. Delivery outages caused by 22 to discuss the gas and security issues with
summer maintenance work and an accident at Ukrainian President Volodymyr Zelenskiy fol-
Gazprom’s Urengoy condensate processing plant lowing her talks with Putin, again suggesting she
have reduced deliveries further. is trying to thrash out some sort of compromise
Putin said future gas supplies were a matter gas deal with the Russians that she will then sell
for talks given Europe's green energy drive, sug- to Ukraine. In addition she is trying to make
gesting that Merkel was attempting to thrash out some progress on the Minsk II protocol to bring
a supply deal for Europe that would result in gas the conflict in Donbas to an end. ™

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