The Higher Regional Court of Düsseldorf canceled a temporary suspension of the contract on purchase of the Opal gas pipeline capacities, so that Gazprom may now increase gas transportation by the "Nord Stream" bypassing Ukraine.
The court's decision in Germany is clearly not in favor of Ukraine and Poland, but it is not yet a catastrophe. In order to understand its essence, it is necessary to recall the whole chain of judicial proceedings.
The "Nord Stream" gas pipeline, through which Russian Gazprom can deliver gas directly to Germany, bypassing transit countries, began operating commercially in October 2012. However, the "Nord Stream" delivers gas only to the German coast, but in order to get into the gas transportation system of Germany and the Czech Republic, it must pass through the land pipeline OPAL.
The European Union, opposing to Russian gas expansion, did not allow the OPAL to be loaded at full capacity. Taking advantage of the constraints imposed by European energy legislation, the EU thus limited Gazprom's supplies by the "Nord Stream" in the "narrow throat" - on the OPAL gas pipeline, as "Nord Stream" is not subject to European legislation.
But last October, the European Commission lifted restrictions on Gazprom's use of OPAL capacities and Gazprom was able to pump more gas through the "Nord Stream".
This decision raised objections not only in Ukraine, which may lose part of the transit flow of Russian gas through its territory, but also in Poland, which also does not want to change the traditional routes of gas transportation.
Therefore, the Polish companies PGNiG and PGNiG Supply & Trading appealed against the decision of the European Commission on OPAL in the court of Düsseldorf and in the European General Court in Luxembourg. The European Court suspended the disputed decision of the European Commission until March 2018 in December of last year. But this temporary suspension was taken by the court as an interlocutory injunction - so that while the court would review the merits of the case, the contested decision would not harm the Polish companies. On July 21, the Luxembourg court canceled this interlocutory injunction, as Polish companies could not prove to the court that they had losses due to increase in the load on the "Nord Stream" and OPAL pipelines. A similar decision was immediately adopted by the court in Düsseldorf on July 28. However, both of these decisions are not final, definitive hearing of the case will go on.
Despite their intermediate nature, these decisions can already play against Ukraine. According to Mykhailo Gonchar, President of the Centre for Global Studies "Strategy XXI", now Gazprom can "take away" several billion cubic meters (bcm) from the Ukrainian gas transit route, which will go to Europe bypassing Ukraine - through the "Nord Stream". However, there will be no dramatic reduction of transit through Ukraine for several reasons. First, in August, the "Nord Stream" will be stopped for two weeks for routine maintenance. Second, this year, Gazprom is pumping gas through Ukraine at a shocking pace: for seven months, transit grew to 53 billion cubic meters - by almost 23% over the corresponding period of last year.
Third, Gazprom will use just the Ukrainian route more actively in winter, since it enables to cover peak demands for gas, while "Nord Stream" operates in a mode of supply of steady gas volumes. Therefore, Gonchar believes that if the volume of transit through the territory of Ukraine is reduced, then it will be possible to discover it only on the basis of the year results.
The interest of Gazprom in reducing transit volumes through Ukraine is not only in pumping less through Ukraine and, accordingly, paying less for it. There is one more nuance - the company Gazprom Export pays for gas transportation through the "Nord Stream", the money goes to the international concern, which built this Baltic gas pipeline. In this international concern, 50% belongs to Gazprom's Swiss "daughter" company, registered in the canton of Zug.
In other words, it is profitable for Russian authorities to pump more through the "Nord Stream", because more money "dropping" on accounts in Swiss banks to the organizers of this "scheme".
Ukraine in this situation can do little, except to insist on consultations with European institutions, as stipulated in the Association Agreement of Ukraine with the EU. Gonchar notes, that the problem is also that Ukraine has no structure that would unite and coordinate efforts of all branches of power against the "Nord Stream" and "Nord Stream-2". The top managers of Naftogaz of Ukraine act actively against these projects, but it is not so high level, because the statements of the leadership of the state-owned company can always be explained by the corporate interests of Ukrainian business, even if it is state one, but not on the interests of Ukraine as a state.
But the inhabitants of the Pechersk Hills, including the Ministry of Foreign Affairs, the president and deputies of the Verkhovna Rada of Ukraine, could more actively engage in a campaign against the "Nord Streams" and not only fill the European structures with letters, but also bother with visits, explaining, at each convenient occasion, all the harmful consequences of construction of these gas pipelines.
There is no need to go too far for examples. Recently, the Russian Ministry of Foreign Affairs made a statement that construction of the "Nord Stream 2" gas pipeline did not imply ending the transit of Russian gas through Ukraine, but Russia was ready to keep transit if Ukraine establishes competitive tariffs and reclaim its lawsuits against Gazprom in the Stockholm Arbitration. Only the chief commercial director of Naftogaz of Ukraine Yuri Vitrenko has just responded to this statement of the Russian Foreign Ministry. I wonder if there would be a statement from the Ministry of Energy or the Ministry of Foreign Affairs of Ukraine?
Alexander SUKOV
