Ukraine must leave energy community for consortium, Medvedev says

The Russian government is interested in forming a natural gas consortium to manage Ukraine’s transit system only if the latter leaves the European Energy Community, which it joined in 2010. “This proposal is supposed to be interesting,” Russian President Dmitry Medvedev said in an interview with Western journalists that was released on March 21. “In what case will it be interesting? Only in that case in which we will understand that our interests – in this case the interests of Gazprom and our state as a whole – are guaranteed. And when can they be guaranteed? When we won’t end up in a situation in which we’ll simply be removed from this consortium in certain events, or in which it won’t be recognized as conforming to European regulations, for example, or to conditions of an energy charter. Therefore an alliance between Russia and Ukraine in this case can only be under the conditions of Ukraine leaving an entire series of corresponding institutions, including the agreement to join the Energy Community.”

Zenon Zawada: Medvedev’s statement reflects the Russian foreign policy of “all or nothing” towards Ukraine, which besides the gas transit consortium includes its approach to Customs Union membership too. It’s also driving a hard bargain with the Ukrainians, as standard practice. If it has a choice, the Ukrainian government won’t engage Russia in organizations that exclude membership in European structures too. Therefore, the Russian government is banking on a scenario in which the Ukrainians will eventually come pleading to form these organizations out of deep economic need, which is unlikely. However, given that certain Russian officials have begun to consider other forms of cooperation between Ukraine and the Customs Union besides full membership, perhaps they will also consider other arrangements for the consortium.