Time is flushed down the pipes

Why Gazprom and Europe can no longer waste time on talking.
In 2016, Russia's foreign energy policy were instituted and the clock started ticking. To leave after 2019 by Ukrainian gas transit, "Gazprom" an urgent need to determine the alternatives - "Turkish Stream" and Nord Stream 2. Both projects still look risky because of the political instability in Turkey and reaction of the European countries. But this time, "Gazprom", it seems, managed to convince the EU authorities to start keep track of time.

Pockets of conflict and hostilities on the outskirts of the Russian and EU energy policy make turns less predictable. More recently, the final death or, on the contrary, a revival of a project could drag on for years. Now the situation is changing months, weeks and days. So, to the beginning of 2016 "Gazprom" came up with new ideas is not the pipe to supply gas to Europe, bypassing Ukraine - Nord Stream through the Baltic Sea and 2 "Turkish Stream" through the Black Sea. And the first option seemed the most promising: monopoly promised economic and political support for long-term partners in the face of the German E.ON and Wintershall, Shell Anglo-Dutch, Austrian OMV and the French Engie. Potential problems seem solvable. The situation with the "Turkish Stream", on the other hand, seemed a stalemate. Downed Turkish Russian Su-24, put paid to the project, which previously moved tight, "Gazprom" and the Turkish state company Botas failed in 2015 to agree either on the route or on the number of pipeline thread, and a dispute about a discount on gas as a result of the first time Moscow and Ankara has led to arbitration. It seemed natural that "Gazprom" will focus on Nord Stream 2, and the southern route will leave for better times.

But at the end of the year the situation is completely overturned. Complicated internal situation forced Turkey to come to Russia in the summer of guilt, the country's relations have improved dramatically, and the "Turkish Stream" got a second chance. "Gazprom" in September, was given all the necessary permits, in October, the sides signed an intergovernmental agreement on the two threads, selected a contractor represented by the Swiss Allseas.

Nord Stream 2, on the other hand, faced serious obstacles. Sharply negative attitude towards the project in Poland was known, but it did not seem threatened - directly related to the gas pipeline the country does not have. Nevertheless, the local regulator denied approval of the project has led to the breakdown of the agreement of its shareholders. Officially on Nord Stream 2 no one denied, but in 2017 the project leaves the sole shareholder of "Gazprom" and unfunded schemes. It is significant that the monopoly has proposed laying Baltic Pipe same Allseas, but not signed a contract, but only an agreement of intent.

Of course, this is not a sentence for the Nord Stream 2, as well as an intergovernmental agreement on the "Turkish Stream" - is not a guarantee of its implementation. Ankara - a difficult partner and getting leverage in the form of a gas pipeline, may well use it to improve gas supply conditions. In addition, "Turkish Stream" can not replace the Nord Stream 2, which is designed for the Nordic market and has much more power.

Here attentive reader can say that over the past year, in fact, nothing has changed - complete uncertainty persists. But there is a new key factor - time.

You're exactly three years before the expiry of the transit contract "Gazprom" for pumping gas through Ukraine, and this means that there is no time to debate already. And if the monopoly position is clear - she wants to avoid the risk of transit through Ukraine or to minimize them, the EU authorities in a much more controversial position. On the one hand, Europe needs a stable supply of Russian gas, on the other - Brussels continued political support to Ukraine, but is not ready to make sacrifices for it. The solution could be a decision of the European companies and banks to take over the modernization of Ukrainian gas pipelines and provide long-term stability of the route. But this did not happen, and now the time has been lost.

Ukraine in 2016 for the first time did not buy Russian gas, getting his reversal of the EU. This allowed the EU to postpone indefinitely the solution of transit problems. But the threat of a cold winter illusion of independence from Russia on the background of the minimum downloads raw materials in Ukrainian underground storage facilities can crumble like a house of cards. And it is in Europe already understand. As in 2014-2015, this winter, the EC Vice-President Maroš Šefčovič again was forced to hold meetings on the Ukrainian gas reserves. And the European Commission is deeply immersed in the problems of Ukraine, the faster dispels illusion.

If in 2014, Europe was convinced that all the troubles of Ukraine - from unequal contract with "Gazprom" and the Russian "gas stick", but now, according to observations "b" appears realization that quickly solve the problems of Kiev virtually impossible. Against this background, the European Commission tried to finish one of the oldest and painful gas disputes with Russia - on the use of land drainage from the Nord Stream OPAL, which allows you to increase the supply bypassing Ukraine. "Gazprom" has gained access to almost all the capacity of the pipe (with the caveat that they must win at public auctions, but there is not to compete with anyone). Warsaw and Kiev decided to challenge it in court, that transferred the conflict around the OPAL from the paradigm "the confrontation between Russia and the EU" in the status of an ordinary intra squabbles.

Until now, Russia and Europe are playing a familiar game: "Gazprom" was trying to expand its presence in the market, and the EU countries have tried to get a discount in return. But now time is running out, and we need to negotiate under conditions where alternatives to Nord Stream 2 and "Turkish stream" is not visible.