Page 5 - FSUOGM Week 28 2021

FSUOGM COMMENTARY FSUOGM

and are sure we will find a way. In the end, we annually via Ukraine between 2021 and 2024,
will have a pipeline that meets all certifica- regardless of how much it actually sends.
tion requirements and international industry “As early as May 2015, Chancellor Angela
standards.” Merkel insisted that gas transit through Ukraine
Back in May US President Joe Biden’s admin- must be permanently secured even after the
istration said it would waive further sanctions completion of Nord Stream 2,” Warnig said. “The
against Nord Stream 2 in the interests of pre- transit of Russian gas through Ukraine will con-
serving Washington’s relationship with Berlin, a tinue to be an integral part of the gas transport
steadfast supporter of the project. from Russia to Europe after 2024. I do not have
“Statements out of Germany this week con- the slightest doubt about that.”
firm that Nord Stream 2 is on track to be finished The CEO said he assumed that the issue had
by the end of summer,” analysts at BCS Global already been raised during governmental talks
Markets (BCS GM) said in a research note on between Germany and Russia.
July 13. “The bigger question is: when first gas “The topic will certainly also be part of the
will begin to flow, which we think will be in time talks between Chancellor Merkel and US Presi-
for the European heating season. dent Biden,” he said.
European gas prices are already unusually Merkel is due to meet Biden in Washington
high for summer, as a result of a heatwave, con- on July 15. It has been suggested that Germany
straints on LNG supply and a sudden rush by and the US might seek guarantees from Rus-
traders to place more volumes in storage ahead sia that it will continue sending some gas via
of the heating season, which typically com- Ukraine after 2024 in return for letting Nord
mences in October. Stream 2 go ahead. Germany might also look to
regulate the pipeline’s use depending on Russian
Ukrainian transit political behaviour, or seek compensation for
Russia has already scaled back transit vol- Ukraine for lost transit revenues.
umes via Ukraine substantially since launch- While Washington has opted against impos-
ing the TurkStream pipeline to Turkey in early ing more sanctions against Nord Stream 2, the
2020. Its shipments via the country came to existing ones remain. And although Biden seems
only 55.8 bcm last year, versus a peak of 94 prepared to let Nord Stream 2 go ahead, there is
bcm in 2017. strong bipartisan opposition to the project in US
The delay to Nord Stream 2’s launch was cru- Congress.
cial, as it forced Gazprom to enter a new transit “The risk is high, it is not something that can
contract with Ukraine for transit volumes in be denied,” Warnig said, adding that if the buyers
2020 onwards. Under this five-year contract, of Russian were hit by sanctions, “we would be
Gazprom will pay to transit at least 40 bcm of gas entering a new dimension of trade war.” ™

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