Page 6 - FSUOGM Week 40 2021

FSUOGM COMMENTARY FSUOGM

Ukraine claims Gazprom "using gas

as a weapon" in Hungarian deal

Gazprom recently cut a new gas supply deal with Hungary for transit via TurkStream

UKRAINE UKRAINE’S national gas company Naftogaz gas prices soared over $1,200 per thousand cubic
and the pipeline operator Gas Transmission Sys- metres, breaking all previous records.
tem Operator of Ukraine (GTSOU) claimed on Gazprom may be sticking to its transit deal
October 1 that last week’s deal by Russia’s Gaz- with Ukraine, but it has not been buying extra
prom to supply Hungary and reduce gas supplies capacity offered by GTSOU and Europe is facing
to Ukraine was the “use of gas as a weapon”, and possible fuel shortages if this winter is a cold one.
have demanded the US and EU impose sanc- Pundits have claimed that Gazprom is deliber-
tions as promised. ately restricting gas deliveries to Europe, despite
“Whether Germany acknowledges it or not, the record prices and demand, as a way of exert-
Russia has aimed its energy weapon at all of the ing pressure on the EU to accelerate the process
EU. The threats to punish Russia at some future of granting an operating permit for Nord Stream
date no longer suffice. The very credibility of the 2, which was completed in September but still
Western deterrents is on the line and the time doesn't have permission to operate.
to respond is now,” Ukraine’s national gas trans- The EU governing authority said last month
port company said in tweet from its corporate that the permits may be issued as late as Janu-
account the same day. ary. Amongst the issues on the table are Europe’s
The controversial deal with Hungary will third energy package rules, which may force
see Gazprom supply Hungary with 4.5bn cubic Gazprom to share half the pipeline’s capacity
metres of gas per year, but it will be delivered via with other “independent” operators. Russian oil
the newly opened TurkStream southern pipe- major Rosneft has already said it is willing to be
line route that went live in January. Previously that other operator. Currently under Russian law
Russia’s delivery of gas to Hungary had been sent Gazprom has a monopoly over gas exports from
through the Ukrainian pipeline network. Russia.
Earlier this year US President Joe Biden The row comes in the context of a growing
backed off sanctions on the Nord Stream 2 gas crisis as EU countries prepare for the loom-
pipeline, which he admitted was a fait accompli, ing heating season. Although there is already
provided Russia refrained from using “gas as a enough gas in storage to get through the winter,
weapon.” there is little marginal extra gas, which is mak-
For its part Gazprom says it has been stick- ing governments nervous. As bne IntelliNews
ing scrupulously to the terms of its new transit recently featured, analysts say that without Nord
deal signed at the last minute with Ukraine in Stream 2 Gazprom’s ability to increase produc-
December 2019 that commits the Russian gas tion and exports is already running up against its
giant to send 40 bcm via Ukraine’s Druzhba maximum; Nord Stream 2 connects Russian gas
pipeline until 2024. Gazprom says it is free to in the Yamal fields to Europe, but that gas cannot
deliver gas to Hungary via any route it wants. be sent via Ukraine because the interconnecting
The US and EU have yet to respond to the pipelines are already at full capacity.
Ukraine’s demands; however, last week EU offi- Gazprom had planned to send 5.6 bcm of
cials called for an investigation into Gazprom as gas to Europe via its newly built Nord Stream 2,

P6 www. NEWSBASE .com Week 40 06•October•2021