Looking from the commercial
standpoint, a new gas war does not make any sense. Especially, while Gazprom
desperately needs cash for its Power of Siberia pipeline to China, as well as
for the South Stream project.
On the other hand, Kremlin's
decisions on the Russian gas policy are always far from being commercially
motivated. For instance, Gazprom wants to invest
over $60 Billion into the South
Stream project and its feeding pipelines that would bypass Ukraine and
eventually close the Ukrainian gas market that annually generates $12-$15
Billion of Gazprom revenue.
With the winter getting
closer, Gazprom has already started to play stick-and-carrot game with East
European member-states of the EU. During the period of maintenance works at the
Yamal-Europe pipeline in mid-September, Gazprom showed a stick to Poland
refusing to increase daily flows of gas through other pipelines. A bit later,
Gazprom gave a carrot to Hungary for halting the reverse flows to Ukraine.
The decision to turn off the
gas tap depends on the mood of Vladimir Putin, which in turn depends on
Ukraine's willingness to bend to Russia's will. In any case, the European gas
front will be anything but quiet.
East European Gas
Malvern, PA, USA
September 29, 2014
version of this comment is published by the
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