Page 7 - FSUOGM Week 40 2021

FSUOGM COMMENTARY FSUOGM

which was supposed to come online over a year used as a weapon against Ukraine. Vitrenko has
ago. also been warning that if Nord Stream 2 is put
Gas prices took another step up on October into operation there is a chance that Russia will
1 to $1,200 per thousand cubic metres after sup- invade Ukraine.
plies in the Yamal-Europe pipeline, which trav- "The Kremlin is doing this on purpose. It's not
erses Poland, fell by 77% from the day before. even sabre rattling; it's the obvious use of gas as
Gazprom said the fall was due to one large cus- a weapon," Vitrenko said on Facebook. "A joint
tomer taking the gas. Gas prices are up 400% statement from the United States and Germany
year to date (ytd). said that if the Kremlin used gas as a weapon,
The Kremlin reiterated the same day that there would be an appropriate response. We are
Gazprom, whose gas exports outside the former now waiting for the imposition of sanctions on
Soviet Union rose 15.3% y/y in the first nine a 100% subsidiary of Gazprom, the operator of
months of 2021, was meeting all its contract Nord Stream 2."
obligations in full. However, Vitrenko admits that Gazprom has
"Gazprom is supplying gas in accordance the right to stop gas transit through Ukraine but
with customers' requests under contract obliga- as the terms of the transit deal are “take-or-pay”,
tions," the company said in emailed comments if Gazprom sends less gas via Ukraine to Hun-
to Reuters. gary it still has to pay for the capacity booked this
In her last month in office German Chancel- year even if it doesn't use it.
lor Angela Merkel has trying to cut an almost Sergei Makogon, the head of the GTSOU, in
impossible energy deal that will allow Germany a press release on October 1 said that Hungary
to receive gas from Russia’s new Nord Stream 2 has been receiving gas through Ukraine for dec-
but keep some gas flowing through Ukraine’s ades, and the Ukrainian side has never violated
Druzhba gas pipelines. During a meeting in its obligations.
Moscow last month Russian President Vladimir “The monopolisation of gas routes by Gaz-
Putin told Merkel that Russia was open to send- prom, which we are currently witnessing, raises
ing gas via Ukraine, provided the EU was pre- questions about the fundamental principles of
pared to sign off on long-term supply contracts, the functioning of EU gas markets – competi-
something that Europe is reluctant to do, but tiveness and transparency,” Makogon added as
Hungary was less hesitant over. cited by the Kyiv Post.
“Today, Gazprom stopped transit of #nat-
Ukrainian protests gas through Ukraine in the direction of Hun-
Under the terms of a long-term supply deal with gary, GTSOU said on its company twitter
Budapest that kicked in on October 1, Gazprom account. “GTSOU has not received a request
halted gas supplies to Hungary via Ukraine and for transit, despite the fact that the capacity
started to send them via Serbia and Austria from Ukraine to enter Hungary is contracted
instead using the new TurkStream pipeline. Pre- for the next 12 months in the amount of 24.6
viously the Ukrainian transit route would have mcm per day.”
typically transported 24.6mn cubic metres of “The monopolisation of gas routes by Gaz-
natural gas per day. prom, which we are currently witnessing, raises
“Supplies via this route have become possible questions about the basic principles of function-
thanks to the construction of a new trunk gas ing of EU gas markets – competitiveness and
pipeline of the company FGSZ Ltd on the ter- transparency,” GTSOU added. “The strengthen-
ritory of Hungary and completion of an expan- ing of the dominance of one player and their use
sion of the national gas transportation systems of levers of influence for obvious political pur-
in Bulgaria and Serbia, where the operators Bul- poses against the background of the shocking
gartransgaz EAD and GASTRANS d.o.o. Novi price hikes must be stopped.”
Sad have commissioned compressor stations,” The Ukrainian foreign minister also com-
Gazprom said in a statement announcing the plained, saying that sending the gas via Ukraine
change of route. was the most economically efficient option as it
The new deal will further deprive Ukraine of is the shortest route.
transit revenues and also means it can no longer Ukraine considers the deal a “purely political,
import reverse flow gas via Hungary, which it has economically unreasonable decision”, which will
been doing since 2015 when Ukraine stopped hurt Ukraine’s national security and its relations
importing gas for its own use from Russia. with Hungary, the ministry said in a statement.
The Hungarian deal makes use of the new Last week Ukraine and Hungary summoned
TurkStream pipeline to the south that went each other’s ambassadors because of the deal.
live in January. Ukraine has already lost $1bn Hungarian Foreign Minister Péter Szijjártó
from the circa $3bn it used to make in transit called Ukraine’s appeal to the European Com-
fees as more gas to Europe that used to transit mission “deeply outrageous” and a “serious vio-
via Ukraine is now being sent through the new lation of our sovereignty and national security
southern spur to Gazprom’s trident of pipeline interests.”
networks serving customers in Europe. Hungary has been one of Russia’s support-
On the same day the head of Ukraine's Naf- ers in the EU. It also ordered a lot of the Russian
togaz, Yuriy Vitrenko, called on Washington and Sputnik V vaccine during the worst of the pan-
Germany to honour what he said were pledges demic, despite the fact the vaccine had still not
to impose sanctions on Gazprom if gas was been approved for use in the EU. ™

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