Comments on your blog posts on Poland, Slovakia, Ukraine (3)

Sorry I couldn’t make it yesterday – I hope we ll find another date and time. Anyway am very curious how your work at this final stage goes on. Thanks for posts & research! You’ve done a great job… I have a feeling we miss a bit information on Russia (or is it me who missed it?) – its interests and goals related to NS2 – as this is kind of key to both understanding better EU countries attitudes and to try to propose best policy line . But I understand you are time limited. That is why I just want to add some points below that you can find complementary to your own research

RE: V4 Poland and Slovakia

As for PL arguments – its good summary, I guess that could be a bit developed. PL opposes NS2 as it sees project would inter alia:

  • not only deepen NWE dependance on Russian gas but also dependance of CEE – this is because the only planned onshore leg of NS2 is EUGAL gas pipeline project (55bcm capacity) is to go from Lubmin/Greifswald to Czech Republic and further
  • decrease diversification options – as Gazprom has been booking capacities at existing / in construction interconnectors in CEE to be able to transmit gas from NS2 (& TurkStream) in the region effectivelly decreasing capacities avaliable for gas from alternative sources, with abundance of Russian gas avaliable in CEE (via EUGAL & other routes) make even harder to build any new infrastructure from new sources (sunk costs) and decrease possibility for new entrants on regional gas market(s) (increasing barriers to enter) while making some other existing infrastructure redundant
  • increase already dominant position of Gazprom in the region, in Germany and in EU increasing options for abuse of this position (Poland and Lithuania opposed commitment decison reached by EC with Gazprom in antitrust case) and limiting effectivness of solidarity mechanisms included in security of gas supply regulation
  • PL fears NS2 would probably be not subject to or exempted form EU law which would be discriminatory comparing with other Russian export pipelines to the EU (including via BY & PL or via UKR & SK)
  • Increase German-Russian bonds in gas sector and beyond which could make harder for Germany to take any harsh political decisions if neede (eg on sanctions etc)
  • Increase security challanges – Ukraine (stability, hampering reforms process, etc) and in the Baltic Sea (security challanges related to huge infrastructure passing via shallow waters, and to increased presence of Russian ships etc
  • Make more difficult maritime traffic in the Baltic Sea including to Polish harbours (Szczecin and Swinoujscie) also of LNG cargos
  • Lock in Russian gas in EU gas/energy mix – make the EU & CEE less effective in using opportunities of the global gas market (eg profiting from increasing avaliability of LNG)
  • Decrease demand in the region/ EU for gas from PL projects – LNG terminal in Swionoujscie (now being expanded) and Baltic Pipe project
  • Decrease effectivness on EU common policy on Russia and Ukraine & undermining EU’s credibility in all neighbourhood / Energy Community. PL sees timing of the project very problematic – it has been proposed less then a year after Crimea annexation, despite EU’s outrage and sanctions regime, and while Ukraine has been continuing to fight Russian supported groups in Eastern Ukraine. It has been implemented despite the fact Russia did not return Crimea or ceased activity in Donbass, and despite Russian engagement in Syria etc. It is seen as one of key factors triggering from 2015 more frequent business and diplomatic contacts of EU (German, Austrian, French) elites with Russian ones despite sanctions and formally more difficult relations EU-Russia – and so going contrary to what has been EU’s line in its foreign policy towards Russia
  • Is seen as contrary to goals of Energy Union especially those primary ones defined by Donal Tusk in its 2014 proposal (included later on in EU Commission’s Energy Union objectives especially this about Security, solidarity & trust) – and somehow showing that individual interest of big players (as Germany) can trump pan-European initiatives & common goals

As for Slovakia – indeed losing transit income is its key worry but guess SK has been raising also number of other issues related to its opposal to NS2. You should remember SK is direct neighbour of Ukraine and hence importanace of its stability and continuation of process of UKR adaptation to EU rules. As for energy security aspect – I am not sure if some key industrial actors do not depend on gas plus if gas isnt key for heating in Slovakia

TSI initiative – it somehow builds on earlier regional initiatives (North-South gas corridor supported by the EU and V4 cooperation in gas / energy security), and I’d say in energy is / can be complementary to EU’s CESEC initiative. All of them are about increasing interconnectivity in the region to bridge the gap between NWE & CEE (see density of gas infra) and to trigger beside existing East – West also North – South connections and flows of gas. It aims inter alia to connect LNG terminals in CEE/ SEE regions (existing in PL, LT and planned CRO,but alos possibly Greek or Turkish ones) but also offshore Romanian gas deposits, Southern Gas Corridor & its European extensions etc enabling gas supplies of gas from alternative then Russian sources

It is interesting to see interest in the TSI of Germany, EU Commission (present at latest summit) and the US.

RE Ukraine

– You are right that Ukraine sees NS2 as a risk to its political security and stability. If both NS2 and TurkStream are built Russia can completely bypasss Ukraine. It means no more gas transit = no more risks for the EU associated with gas = lesser EU interest and engagement in Ukraine. As you correctly wrote Ukraine fears that  Russia could do even more harm than it is currently doing in eastern Ukraine (ongoing conflict & military activity there). Questions on possibility of a full scale conflict are being posed. Lesser EU engagement and interest would also probably seriously hamper difficult process of reforms in Ukraine, which would most probably has an adverse effect on country’s political nad economic performance etc. Plus could have result in change of attitude in Ukraine (political elites / public opinion) on cooperation with Eu which would increase risk of return to murky deals with Russia etc. So it could be both – lesser EU engagement in Ukraine and Ukraine drifting away from the EU. The consequences of that are uncertain, but kind of worrying those in Ukraine who are pro continued approachment with EU but also to EU MSs in CEE being Ukraine’s neighbours

– complete stop or very big decrease in gas transit via Ukraine could also have a very negative effect of Ukraine’s gas infrastructure. You can not just simply switch off gas flows and then switch them on. Stopping gas flows would mean risks of further degradation or redundance of that infra. Low / zero flows from Russia would also substantially decrease pressure in gas transit system and so it is uncertain if enough gas can be pumped from EU / West to Central and Eastern Ukraine to satisfy internal needs.

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