Ukraine creating EU lobbying group to stop construction of Nord Steam-2
18 June 2018
The Ukrainian government is creating a lobbying group
in the EU that will work to prevent the construction of Nord Stream-2, the
natural gas pipeline that will dramatically boost Russia’s capacity to pump gas
directly to Germany, bypassing Ukraine and Poland, President Petro Poroshenko
wrote on his blog on June 18. The Nord Stream-2 is a political project that has
no economic component, Poroshenko said. Instead, its main objective is to
deprive Ukraine of USD 3 bln in annual revenue from the transit of Russian gas.
He also said that Ukraine is leading negotiations with Germany to invite it
into an international consortium that will manage Ukraine’s transit pipeline
pumping Russian gas to EU countries.
In its turn, the Polish government is urging the EU to
adopt changes to the EU gas directive that will complicate the construction of
Nord Stream-2, the polradio.pl news site reported on June 17. The report cited
Polish Deputy Energy Minister Michał Kurtyka, who said he expects EU
ambassadors will consider changes to EU directives in June that will place
under EU regulation any offshore pipelines connecting to EU countries.
Alexander Paraschiy: The
construction of Nord Steam-2 indeed adds risks that Ukraine’s gas transit
system connecting Russia and EU countries will become virtually obsolete by the
early 2020s. The risk is also aggravated by the fact that the current gas transit
contract between the Ukrainian and Russian gas monopolies concludes in late
2019. So far, it’s hard to expect tangible success in opposition to Nord
Steam-2, as long as Germany remains highly interested in securing its dominant
role in the EU natural gas market.
We expect the Ukraine revenue from gas transit
services will start falling as of 2020, which, among other factors, will worsen
the country’s current account balance. At the same time, mounting opposition to
Nord Steam-2 in some EU countries, as well as the U.S., can at least slow and
smoothen the decline rate in the long term.
