The final departure of the partners-co-investors “Gazprom” from the project “Nord stream-2” calls into question the intention of the Russians to refuse the transit of its gas through Ukraine in 2019. Search money and the necessary technologies will delay the construction of gas pipelines bypassing Ukraine, as well as give Gazprom an extra excuse to re-inflate the speculation about the reliability of Russian gas transit to Europe through Ukrainian gas transportation system (GTS).
“Gazprom” was left alone
At the end of last week the Austrian newspaper Der Standard wrote that the Russian “Gazprom” remains the only participant of the project on construction bypassing Ukraine gas pipeline “Nord stream-2”. The pipe should be run to bypass Ukraine, from Russia to Germany under the Baltic sea, specifically to ensure that in 2019, Russia could refuse the transit of its gas through Ukraine. Meanwhile, the Russian transit annually brings to the Treasury of about $2 billion.
The European partners “Gazprom” — Engie, OMV, Shell and Wintershall Uniper — left the Russian monopoly, finally abandoning financial participation in this project. The impetus for this step was the opposition of the Antimonopoly Committee of Poland, which like Ukraine, suffered damage from this project. On the final refusal of partners “Gazprom” indicate the intention of the company to increase in 2017 investment in the project up to €1.75, which is almost 1.5 times more than previously planned.
As says the President of the Center for global studies “Strategy XXI” Michael Gonchar, this event can be considered the final statement of the fact that the process of withdrawal of Europeans from the “Nord stream-2” is completed.
“Europeans, in principle, even in the summer, as soon as he identified the problems with the Polish anti-monopoly Committee, quietly withdrew from the agreement (“Northern stream-2”, — “Apostrophe”). Now completed a procedural design of this gap. And “Nord stream-2″ now exactly remains purely Gazprom’s project”, — says the expert.
After the gap between the Russian monopoly and its European partners have formed completely, before Ukraine had two questions, the answers to which will be clear in the short and medium term. The first — increase “Gazprom” to the end of the heating season the information attack on Ukraine because of the alleged lack of gas reserves in Ukrainian underground storage (UGS). And second — whether this event is to delay the shutdown of Russian gas transit through Ukraine, which Gazprom planned for 2019, when will end its transit contract with “Naftogaz of Ukraine”.
Weather the scandal
“Apostrophe” already wrote that “Gazprom” in the fall of 2016 sent to its customers warning-response with a promise in the midst of cold weather to stop the flow of gas to Europe, if ever accuses the Ukrainians of siphoning off gas from the GTS. And when in January began in Europe the extreme cold, the Russians took advantage of the moment to “warn” Europe that Ukraine allegedly “unreliable” transit country. However, panic has failed.
Nevertheless, by the end of the heating season in the Ukrainian UGS will objectively decrease the amount of gas and then on expectations of cold weather in late February — early March “Gazprom” will receive the occasion to renew to weather the scandal, using it to re-prove the need for the construction of “Nord stream-2”. However, according to energy expert Valentin Zemlyansky, this attack is unlikely to be effective, because Ukraine has enough gas to “leave” the heating season to the end without incident.
I wrote “Apostrophe”, the experts agree that 14.5 billion cubic meters of gas in underground storage facilities is enough for this year, since Ukraine is not expected to significantly cold weather, and gas consumption in the country has declined in recent years. In Russia, by contrast, in Northern areas the temperature in winter is traditionally low and we cannot exclude that at the peak of cold, the Russian gas monopoly will experience a shortage of gas for export to Europe because of a sharp increase in domestic energy consumption.
Plans “Gazprom” to refuse transit of Russian gas through Ukraine in 2019 will depend on how quickly they will build the bypass pipeline network, which includes the “Nord stream-2”. Now the Russians will have to find the money. According to Russian media, the value of the “North Potocka-2” is around €9.9 bn Since the Europeans have abandoned direct involvement in the project, Gazprom will have to find the money yourself.
According to Mikhail Gonchar, the direct shareholders of European companies are now unlikely to find, as everyone will be afraid of sanctions. The same applies to European banks. However, according to experts, the wave may be intermediaries that will help “to Gazprom” to negotiate with banks in China or the Arab countries on the subject of new loans to the “Nord stream-2”. However, how long it will take time, no one can say.
Valentin Zemlyansky suggests that for these purposes can be issued Eurobonds. “Financing can be found. But for this we need to clearly understand the goal, i.e. what will be the fate of the project. The pipe can be put, is not a problem. But what with it to do? he explains. — We need to understand what can expect to “Gazprom”, if European companies out of the consortium”.
According to experts, to judge whether you will still need the gas from “Northern stream-2” Germany and other consumers, will be possible only after some time, when clarify the final position of the European Union and other stakeholders.
However in “Gazprom” activities to find the necessary amount are already underway. According to Bloomberg, “Gazprom” is going for a three-year freeze dividend payments at a level of 2016 and sell assets of 350 billion rubles. The volume of loans to 2018 should increase twice and reach 705 billion. According to Bloomberg, such a large-scale sale of assets “Gazprom” has not done since 2010.
In addition, Russia hopes that European companies will take part in financing the “Nord stream-2”. About this a few days ago said the head of the Board of Directors of Gazprom Viktor Zubkov.
“I think that in the coming months, the issue of collective funding will be solved… Foreign partners as we are interested in having this project happen” — quoted the head of the Board of Directors of “Prime”. According to Zubkov, Gazprom is now in cooperation with European partners is working to ensure the legal base for joint financing of the project.
But while the cooperation with European partners has not resumed, “Gazprom” will be forced to solve not only financial problems but also, according to Potter, the problem with search technology. In Russia there are no technologies that allow the company to lay a pipe under the Baltic sea. It can do only European contractors. “And because of EU sanctions is likely to continue, they would think twice before you go on some kind of cooperation with “Gazprom”, — the expert believes.
Moreover, according to Potter, even if that “Gazprom” will be able to quickly find the missing money and contractors with the necessary technology to run the operation “Northern stream-2” will not until 2020-2021 years, but not in 2019.
“Any project of this magnitude almost never commissioned initially in a certain period of time. Because to build a pipeline and put it into operation is not the same thing. It is necessary to complete and prepare the compressor station, installation of preparation of gas for transportation under ultrahigh pressure and hold a lot of other commissioning work. That’s a lot. Therefore in “Gazprom” already know that in 2019, nothing will,” — said Gonchar.
In addition, it tells Zemlyansky, the Russian and Ukrainian gas transport system — the two parts of the Soviet gas pipeline, closely related. Thus the Russian part of the pipe can be fully operational only on the condition that there is the possibility of supply through Ukraine. “Plus to supply Eastern Europe with Russian gas in any case have through the Ukrainian GTS,” he adds. Therefore, the chances that the Russian transit via the Ukrainian GTS will ever stop completely, extremely small.
This is also evidenced by the operating experience of the first thread “Northern stream”, which showed that just a new pipe to bypass Ukraine is not enough. As the General Director of consulting company East European Gas Analysis Mikhail Korchemkin, already existing, thread showed that a new branch of the pipeline can’t replace the Flex mode, which is able to run the Ukrainian GTS, that is, to sharply reduce or increase the volume of transit. The very same Nord stream is “transport or pay”, that is “Gazprom” enters into a contract for transportation for a fixed fee regardless of amount of gas pumped.
“The more you pumped, the lower the cost per thousand cubic meters”, — he explains. According to Korchemkin, it is unlikely that European consumers will agree just to move from flexible supplies through Ukraine when they are today getting as much as you want, to uniform year-round supply through the “Nord stream”.
As according to Zemlyansky, safety and volume of Russian gas transit through Ukraine’s territory after 2019 — a matter of time. The answer will become clear, when “Gazprom” to finalize the funding sources of the “Nord stream-2” and the timing of the project. Experts believe that the solution to these problems will be given to the Russian monopolist. At the same time to talk about the success of these efforts today is a special occasion not.