New Russian gas deals are "enough to make even a seasoned energy observer's head spin"

New Russian gas deals are "enough to make even a seasoned energy observer's head spin". (csis).

In the twelve months since the collapse of global oil prices and the imposition of Western economic sanctions against Russia, the number of new Russian gas export project announcements has skyrocketed.

Only last month, Gazprom signed a memorandum of understanding (MOU) with three European companies to build a second large gas pipeline system under the Baltic Sea called Nord Stream II.

This was preceded by the announcement in December by President Vladimir Putin himself of the cancellation of the ambitious South Stream gas pipeline under the Black Sea to be replaced by an equally grandiose project, soon to be dubbed Turkish Stream.

In Kurdish a donkey is called: 'Kerdogan'

Both Nord Stream II and Turkish Stream are designed to bypass the critical transit route through Ukraine utilized by 40 to 50 percent of Russia’s current gas exports to Europe.

Russia and Gazprom’s position on whether gas transit through Ukraine will continue after the current agreement expires in the not-too-distant future flip-flopped within a matter of weeks recently – first proclaiming that all transit will cease after 2019, then declaring that negotiation of a new deal has been ordered by President Putin.

In the past year, we have also seen the supposed conclusion of not one but two large gas deals with China. Together with numerous previously proposed liquefied natural gas (LNG) and export pipeline projects, this picture is enough to make even a seasoned energy observer’s head spin.

To make matters worse, the mainstream press tends to report each one of these announcements, no matter how fanciful, as if they are all realistic projects that will be completed by the notional target dates even as Russia’s financial position continues to deteriorate.

The total cost of these projects is somewhere between $150 and $200 billion, and it is unlikely that Russia (even together with its prospective partners) could muster the necessary capital to complete most of them amidst Russia’s low oil revenue, budget deficits, and falling GDP.

Instead, the raft of announcements, postponements, and cancellations in June and July of 2015 suggest that Russia is groping for a viable gas export strategy. Read the full comprehensive report here.

Gazprom signs key Nord Stream-2 deal with EU companies, avoids need for gas transit through Ukraine.

Gazprom signs key Nord Stream-2 deal with EU companies, avoids need for gas transit through Ukraine. (RBTH).

Russia’s gas giant Gazprom has signed a binding shareholders’ agreement with European energy companies for the construction of the Nord Stream-2 pipeline from Russia to Germany. The landmark deal was inked at the Eastern Economic Forum, held in Russia’s far eastern city of Vladivostok on Sept. 3-5.

Gazprom will own a controlling stake, while Germany’s E.ON and BASF/Wintershall, Austria’s OMV and Royal Dutch Shell will receive 10 percent each, while France’s Engie will receive 9 percent.

Economic interests take priority

In itself, the signing of the shareholders’ agreement for Nord Stream-2 is already evidence that the EU, as before, has no common position either on relations with Gazprom as a whole or on today’s most pressing issue – that of gas transit through Ukraine.

The largest power companies in the UK, France, Germany and Austria signed the project, whose implementation will minimize the transit of gas through Ukraine, which all these states continue to support politically. However, the agreement is contrary to the position of Brussels; according to Vice-President of the European Commission Maroš Šefčovič, there is no need for any gas pipelines bypassing Ukraine.

“Germany believes that Ukraine should be supported, but the path to democracy and reform is very long, and we are losing time; the Ukrainian gas transportation system must be modernized, but no one is ready to invest,” said Alexander Rahr, research director of the German-Russian Forum, adding that plans for Nord Stream-2 do not violate EU law, including the Third Energy Package.

Southern Europe left high and dry

The shareholders’ agreement is a serious blow to the south-eastern countries of the EU, which were prevented by the United States and the European Commission last year from building the South Stream pipeline, intended to supply Russian gas to Southeast Europe via an undersea pipeline and a distribution hub in Turkey.

Now it is proposed to build a gas pipeline which, with a capacity of 55 billion cubic meters a year, which will bring billions of dollars in transit fees not to Bulgaria and Hungary, but to Germany and the Czech Republic. In addition, virtually all Russian gas will reach Europe through Germany, providing German gas pipeline companies with stable income for decades.

“The participants of South Stream – Bulgaria, Greece and Italy – are the countries that do not have enough weight to make decisions contrary to the general political line, but Germany will be able to,” said Fyodor Lukyanov, head of the Council for Foreign and Defense Policy, an independent Moscow-based think tank. Hmmm.......Guesss the Turkish stream will remain a 'Turkish dream'? Read the full story here.

Debt ridden Ukraine asks Russia for lower gas prices for coming winter season

Debt ridden Ukraine asks Russia for lower gas prices for coming winter season. (AP).

Emboldened by a deal with international creditors to write down part of its debt, Ukraine on Friday asked Russia for lower gas prices for the winter season.

Russia and Ukraine last year struck an emergency deal on prices through the winter. That deal has expired, however, and the sides have to hold new talks if Ukraine is to receive more Russian gas.

Prime Minister Arseniy Yatsenyuk said on Friday he is convinced that Kiev and Moscow should go back to the last winter deal, which saw Ukraine pre-pay for gas but receive a sizeable discount.

"We are convinced that the only mechanism to ensure a gas transit to the EU as well as stable supplies to Ukraine is applying the same mechanism that was worked out last year between the EU, Ukraine and Russia," he said in comments released by his press office.

The Ukrainian government on Thursday reached a deal with its international bondholders to lighten its public debt burden. It will see the creditors write off 20 percent of their bond holdings, shrinking $19 billion in sovereign debt to $15.5 billion.

Russian creditors did not take part in talks, but Ukrainian Finance Minister Natalie Jaresko on Thursday insisted that Moscow should accept the same terms because "it would not get a better deal" than Ukraine's other creditors.

Moscow insists that it wants to be fully repaid for a $3 billion loan it gave to Ukraine. The debt is due at the end of the year.

Speaking to reporters late Thursday, Russian Finance Minister Anton Siluanov noted that Russia's loan "was not a commercial one. We provided funds for Ukraine with a below-market interest rate."
 Hmmmm......"Gazprom" has asked the Stockholm arbitration to collect the $ 29.2 billion Gas debt from Ukraine.Read the full story here.

Related:   Belarus ready to increase Russian gas transit to EU if needed.

Belarus ready to increase Russian gas transit to EU if needed.

Belarus ready to increase Russian gas transit to EU if needed. (Taz).

Belarusian President Alexander Lukashenko said Friday that his country was ready to increase the volume of Russian gas transiting through Belarus to Europe, if needed, Sputnik reported.

Earlier in the day, Lukashenko and Miller formally announced the construction of the multifunctional Gazprom Center in the Belarusian capital of Minsk.

Lukashenko emphasized that Belarus was not an "alien territory" for the Russian energy company.

Last month, Ukraine, via which Europe receives over 40 percent of its gas from Russia, ceased all purchases of gas from Gazprom because Kiev and Moscow were unable to reach an agreement on gas deliveries for the third quarter of 2015.


Moscow has repeatedly voiced concerns over Ukraine's reliability as a transit country. Hmmm.......Sounds like a long , Cold Russian winter is coming to the Ukraine.

Related: EU, Russia and Ukraine meeting, trying to resolve 'Winter' gas issue could take place at end of September.

EU, Russia and Ukraine meeting, trying to resolve 'Winter' gas issue could take place at end of September.

EU, Russia and Ukraine meeting, trying to resolve 'Winter' gas issue could take place at end of September. (RBTH).

The European Commission sent Russian and Ukrainian energy ministers a document which sets out the main points on which an agreement on gas supplies to Ukraine is needed, European Commission member for energy Miguel Arias Canete said.

"This paper will be discussed in bilateral meetings at the ministerial level. The first one will be on August 27 with the Ukrainian minister and possibly at the beginning of September with the Russian minister. There is a convergence that there will be probably a trilateral ministerial meeting at the end of September," Arias Canete said at a press conference in Brussels on August 20.

The document outlines the nature and timeline for the protocol, formula for prices and discounts, minimum purchase amounts and their financing.

The European Commission is working tirelessly in order to reach a new gas delivery protocol from Russia to Ukraine from October 2015 to March 2016, Arias Canete said.

"The commission wants very clearly to have the second winter package. This is our position", he said.

Arias Canete said that the last three-sided ministerial meeting on gas in Vienna finished without results. A draft protocol was readied for Vienna upon which the sides reached a working level agreement, however the positions changed on the ministerial level.

"It became clear that at the moment there is no political will on both sides to agree on a new protocol. That is why the commission has informed the Normandy Group about the deadlock of the negotiations and asked for a stronger political steering from the heads of states and government commissars," he said.

He also outlined the arguments of the European Commission in favor of a protocol. First of all, it is necessary to ensure the gas supply to Ukraine in the coming winter. And although the situation has improved a bit compared to last year due to the reverse gas supplies from EU countries, "Ukraine still needs to fill its storages to at least 19 billion cubic meters (bcm) in order to prepare for a rough winter. 

The current level is 13.5 bcm. They need to buy more gas," Arias Canete said.

Additionally he said that it is necessary to guarantee the supply for Ukraine, while at the same time maintaining the transits of gas from Russia to the European Union, as it is in the interests of Moscow, so that they can retain their position as a reliable supplier. Hmmm.........I wouldn't count too much on a solution, in view of: "Gazprom" has asked the Stockholm arbitration to collect the $ 29.2 billion Gas debt from Ukraine.

"Gazprom" has asked the Stockholm arbitration to collect the $ 29.2 billion Gas debt from Ukraine.

"Gazprom" has asked the Stockholm arbitration to collect the $ 29.2 billion Gas debt from Ukraine. (RBC). [GoogleTranslate].

"Gazprom" said the amount of claims to "Naftogaz Ukrainy", transmitted to the Stockholm arbitration is $ 29.2 billion

The total amount of claims against "Gazprom" to "Naftogaz Ukraine", is $ 29.2 billion, follows from the report "Gazprom" for the second quarter 2015. The document notes that the company has specified the total amount of their claims in a counter lawsuit, filed in the Arbitration Institute of Stockholm Chamber of Commerce June 12, 2015.

At the beginning of May 2015 it was reported that the total amount of the claims of "Gazprom" to "Naftogaz Ukraine" in the Stockholm arbitration is $ 23.837 billion. However, in late May, the head of "Gazprom" Alexei Miller said the company will send a new view arbitration with the requirement to recover from the "Naftogaz Ukraine" another $ 8.197 billion in accordance with the rule spelled out in the contract "take-or-pay" for 2014.

The total amount of debt, "Naftogaz of Ukraine" with the additional requirements of Miller appreciated then at $ 29.477 billion.

Oral hearings on the suit of "Gazprom" to "Naftogaz Ukraine" in the Stockholm arbitration scheduled for February and March 2016, a decision may be rendered by the arbitrators at the end of June 2016.

In the report "Gazprom" also reported that in June 2015 the company "Gazprom export" initiated in the same Stockholm arbitration proceedings against the company SC "Turkmengaz". "Daughter" of "Gazprom" requested arbitration to revise the price of the purchased from GC "Turkmengaz" natural gas. Hmmm.....Ukraine is totally broke, ready to default and has no gas reserves for coming Winter.....Any guess what will happen next?

Large Russian military offensive in Ukraine possible within weeks: US analyst.

Large Russian military offensive in Ukraine possible within weeks: US analyst. (Unian).

Russian troops in east Ukraine could launch a major offensive within weeks, said American military analyst Phillip Karber in an interview with Ukraine Today.

“They have intelligence, they are run by Russian officers, there is Russian electronic warfare and they have heavy artillery brigades so they can orchestrate and coordinate….this is not the infrastructure you put in if you're expecting a ceasefire to last, this is the infrastructure you want to put in if you want to launch a major offensive, and not just one that goes a little way, but one that goes very deep," says Karber, arguing that the Kremlin hardly expects the Minsk ceasefire agreement to last, Ukraine Today reports.

Karber also suggested that Washington benefits from US Army training Ukrainian servicemen. According to Karber, the American instructors claim that they are “learning more from them than they are learning from us. They taking mass fire artillery strikes that we've never experienced, they are under UAV's constantly, we've never experienced that”.

Meanwhile, the Obama administration has stopped short of sending weapons to Ukraine, proclaiming that a diplomatic solution to the Donbas conflict is instead, the way forward.

See unian.info’s video section for more of the latest news from Ukraine in video from Ukraine Today, Ukraine’s 24-hour English-language news channel.

#ATO Press Center: 106 attacks on #Ukrainian Army positions in #Donetsk and #Lugansk Regions. http://t.co/FFYOGQUud2 pic.twitter.com/swDxls4idr

— Lugansk News Today (@LUGANSK_TODAY) August 7, 2015

(L) Recent sat (c/o @finriswolf) of Russian army depot (R) Krasnyi Luch, Luhansk reg, Ukraine https://t.co/yrFb1YNMl0 pic.twitter.com/jiUnAgXufc

— GorseFires Collectif (@GorseFires) August 7, 2015

Russian prosecutors to review legality of Baltic independence.

Russian prosecutors to review legality of Baltic independence. (Interfax).[Googletranslate].

Earlier, the Prosecutor General's Office acknowledged the illegal decision on the transfer of Crimea to Ukraine in 1954.

Russian Prosecutor General's office began checking the legality of recognition of the independence of the Baltic republics by the State Council of the USSR in 1991, "Interfax" on Tuesday, a source familiar with the situation.

"Legally, the decision to recognize the independence of the Baltic States is defective due to the fact that it was taken by an unconstitutional body," - said the agency interlocutor corresponding parliamentary inquiry into the main supervisory authority.

In his opinion, the answer to the appeal "would be the same as for the request to the Crimea." Source Agency said that Prosecutor General's Office has recognized the illegal decision on the transfer in 1954 of the Crimea from the RSFSR in the Ukraine, but, according to him, this decision has no real legal consequences.

"Prosecutor General's Office only stated a fact, namely, that the transfer of Crimea to Ukraine in the days of Nikita Khrushchev did not occur on a constitutional basis, since the relevant decisions are not taken by the competent authorities", - said the agency.

According to him, "in the present circumstances and realities that no authoritative body that could reverse this decision." "Although such a need has not. Crimea is again a part of Russia, and the question went to the political plane," - said the source.

However, he believes that the answer to the request of the Prosecutor General should be "more balanced". "Recognizing the illegal or that fateful decision, one can go too far - until the problem of the legitimacy of the Soviet Union and other countries" - said the source.

Because, he says, when making such decisions on a deputy's request "should take into account not only the legal but also the political aspect of the issues raised." Hmmm...So this time, they'll send lawyers in stead of little green men?

Video - Eye-witness: the Russian's wiped out TWO full mechanized Ukraine battalions in 3-mins using thermobaric weapons

Video - Eye-witness: the Russian's wiped out TWO full mechanized Ukraine battalions in 3-mins using thermobaric weapons. HT and Source: RobPulseNews.

Joseph Wood, Professor at The Institute of World Politics, and Phillip A. Karber, President of The Potomac Foundation and Adjunct Professor at Georgetown University, discussed " NATO and Central and Eastern Europe."

This panel was part of the The Fifth Annual Kosciuszko Chair Spring Symposium on the topic of "Between Russia and NATO: Security Challenges in Central and Eastern Europe." The event, which took place on April 25, 2015, was sponsored by The Institute of World Politics.

Surprise! - Belarus will deploy Russian S-300 missiles near the Polish border.

Surprise! - Belarus will deploy Russian S-300 missiles near the Polish border. (politnavigator).[GoogleTranslate].

Defense Minister of Belarus Andrei Ravkov said that Belarus received the Russian missile systems S-300 and will be located in Brest, Grodno and Vitebsk regions, respectively, at the borders of Poland and the Baltic countries.

This was reported by "Polish Radio".

Head of the Belarusian Defense Ministry also said that Minsk is negotiating to obtain from the new Russian air defense systems S-400.

General Ravkov added that his country considers the potential threat on its borders stay of NATO troops. He also noted that, to date, no country in the world is a potential opponent of Belarus.

The military said that Belarus will cooperate with NATO, and it does not prevent the strategic relationship with the Russian Federation.

As reported by "PolitNavigator" Warsaw previously stated about the need to be placed on Polish territory heavy weapons because of the "threat of the aggressive actions of Russia" in the region. And today, in Poland were carried out exercises NATO Response Force.

Video - Ukrainian drone confirmed concentration of Russian troops in Lugansk. 63 tanks detected in 2 hours

Video - Ukrainian drone confirmed concentration of Russian troops in Lugansk. 63 tanks detected in 2 hours.(Lugansk).[GoogleTranslated].

Intelligence unit of Ukrainian Army Regiment “Dnipro-1″ published a video recorded by the drone that was flying over Lugansk.

In 2 hours flight they confirmed concentration of Russian troops on the East of Ukraine. They checked several bases and found 63 tanks, 32 APCs and 96 military trucks. Read the full story here.

 

Minority shareholding: The shares which gives potentially power to Gazprom and Rosneft over the EU energy market.

Minority shareholding: The shares which gives potentially power to Gazprom and Rosneft over the EU energy market.(delfi). A Must read! Read the full story here.

Polish MP Jacek Saryusz-Wolski: 'Russia may use Belarus for troops deployment'.

Polish MP Jacek Saryusz-Wolski: 'Russia may use Belarus for troops deployment'. (charter97).

Jacek Saryusz-Wolski, a Polish MEP and deputy chairman of the Christian Democrats group, criticised Russia at the Wroclaw Global Forum. According to him, it's time to consider the issue of delivering weapons to Ukraine as the Minsk agreement is not implemented.

The politician spoke to Radio Svaboda about his vision of Russian-Belarusian relations.

– Does Russia really take Lukashenka as an ally? Is it ready to stake on him?

– We can hardly say that free and democratic elections would help Lukashenka. It would be a problem for him to overcome the 50% barrier if the media were free. To be short, free Belarus would most probably elect a new president. Russia is not going to allow free elections in Belarus, so you cannot believe in anything it says.

– Lukashenka began to use pro-Ukrainian rhetoric more than a year ago. But the recent military exercises on the border with Poland and Ukraine do not match his words. Does it mean that the leash on which Putin keeps Lukashenka became shorter?

– We need to look at what he does rather than what he says. He speaks to confuse both Moscow and the West. We shouldn't take his meanders seriously. He swings from side to side.

The facts are that Belarus has the common military space with Russia. The fact is the military exercises on the border. The fact is that if Belarus is needed to deploy Russian troops, it will be done. Unlike the West, I don't feel optimism about his or his propaganda's statements.

Belarus yesterday started large-scale command and staff military exercises in the Gomel region close to the Ukrainian border. The drills will last until June 18. It is planned to practice the phased strengthening of the state border in the southern direction. The drills involve the separate infantry company of the territorial troops consisting of reservists as well as territorial border guard and interior units of the Gomel region.