In accordance with the predictions, Russians are preparing the grounds for excluding Ukraine from the transit of gas for Europe. Poland has to, therefore, continue the already taken actions towards diversifying deliveries and securing the European standards in gas relations with Russia.
– The involvement of European companies in the consortium that manages the pipelines in Ukraine will make the construction of the Russian South Stream redundant – the Prime Minister, Arsenyi Yatsenyuk, is saying. The Ukrainian Parliament has accepted the bill about reforming Naftogaz. Ukraine is to keep 51 percent of shares in the Gas Transit System (GTS) through Naftogaz. The other 40 percent of shares are to be in the hands of a company from the EU or the United States. The concept of this double-sided consortium is different from the one proposed by the former president, Victor Yanukovych, which was a trilateral consortium with the participation of Gazprom. The European diplomats with whom I spoke said that the offer has to come from Ukraine in order for the Western companies to start considering the option of investing money in the Ukrainian GTS. Now it has finally appeared on the table. Yatsenyuk highlights that in the EU’s interest is to direct the whole gas transit from Russia to the Ukrainian pipelines. Our research shows that it is indeed true that securing the transit through Ukraine would be a better alternative for the agreement of not including the Russian pipelines in the EU’s antimonopoly laws. We wrote about the competition between these two concepts of gas deliveries to Europe in the analysis: Gas Yalta on the horizon.
Read also: Gas Yalta on the horizon
Meanwhile, Gazprom has pronounced its willingness to resign from the mechanism of amends of gas from the Ukrainian magazines, which was extracted for the extra deliveries to Europe. Until now, in case of an increased demand, Ukrainians lent their raw material to Europeans and Gazprom later compensated for these losses. The Russian company wants to back out from this mechanism, but it is guaranteeing that this will not influence the deliveries to Europe. To do so, it is planning to use the magazine power in Europe, most likely in Germany. Gazprom is intending to pump its gas to the European magazines this summer. Since Monday, there are mandatory advance payments in the trade between the Russian firm and the Ukrainian Naftogaz. Ukrainians will not get the raw material if they do not pay for it beforehand. Furthermore, Russians are emphasizing on the repayment for the $4,5 bn delivery. During a telephone talk with the Russian president, the leaders of Germany and France appealed for renewed discussions on this topic. If Russians do not resign from the prepayments, the gas debts and deliveries to Dnieper will most likely be repaid by loans from the West. This possibility was given by Austria last week. Such small stabilization for European money is currently the only way to block the machination of Russia, which is leading towards provoking a gas crisis and then blaming it all on Ukrainians. On this account, Russians have already started to create propaganda materials that portray the Prime Minister, Yatsenyuk, as a gas thief.
From the Polish point of view, Gazprom’s next moves are a predictable continuation of the fixed course of Russian energy policy. Our answer should also be immutable. The energy security of Poland is dependent on the possibility to create a gas policy that would be fully independent from Russia.
Such independence is assured by the infrastructure that is bonded by the EU’s antimonopoly law. Besides the next cross-border connections, a key point on its map of our country is the LNG terminal in Swinoujscie. In addition to quickly finishing the construction (currently the delay is one year and the object is to be activated in June, 2015 – there can be no further delays), it is necessary to create conditions for the most profitable receipt of LNG in Swinoujscie in order for the tankers with the raw material from Qatar or the United States to end up in Poland and not in terminals of Benelux countries. According to the information that I managed to get to, the tariffs for regasification of LNG in Poland will be significantly higher from the ones offered in the terminals in Western Europe.
If we do not lower this tariff, Poland will receive only the very expensive gas from Qatar. It will be cheaper to deliver the new gas to, for example, the terminal in Zeebruggee in Belgium and there exchange it for Gazprom’s raw material. In order to fully use the potential of diversifying the object, the profitability of import through Swinoujscie has to increase.
Besides lowering the tariff, the implementation of this goal could be achieved with a certain postulate that is a part of the concept of the so-called joint gas purchases, which I have already described in more detail. A voluntary, regional aggregation of demand, by one of my interlocutors called a “gas Groupon,” will allow for the joint orders of LNG, for example by Poland and the Baltic States. In the deal with Qatargas, PGNiG signed up for 1 mln ton of LNG (1,5 bn m3) per year. The target capacity of the terminal in Swinoujscie is to be 5 mln ton of LNG (7,5 bn m3). The capacity of the object in Klaipėda is to be 1,5 mln ton of LNG (3 bn m3). Regardless of whether the next terminal will be created in Estonia or Finland (the EC blocked the possibility of financing both projects), its capacity will be similar to the Lithuanian one. It is possible to estimate that the aggregated volume of the LNG deliveries to our region will be about 7 mln ton (9,5 bn m3). After using the “gas discount,” we would be able to order this amount from, for example, the most advanced in the plans of exporting from the USA, Cheniere Energy. A larger volume would provide better conditions and would be more attractive to the Americans. Then, the amount of terminals on the Baltic Sea would be a factor that increases their competitiveness and not the rivalry between them. In such configuration, it is more possible to get the tankers from the USA in our terminal and buy the American LNG for cheaper than the Qatari one. In the future, the aggregated purchases would be open for other firms to join, for example for the Ukrainian Naftogaz, which could use the emergency volume received by the European terminals, maybe through the Ukrainian object. Of course sin qua non of getting new volumes is decreasing the amount of gas that is under the take or pay clause in the current contracts, and that is all up to the political apparatus.
If it is possible to implement these plans, the Russian gas weapon looses its power because the energy policy of Russia will not have any influence on the security of deliveries to Poland. That is why it is necessary to ready the grounds for a profitable use of the LNG terminal and keep on enforcing the Polish postulates, which have already found their way into the European Commission’s Energy Strategy and, after the EU’s summit at the end of June, might even change into realistic plans of action for increasing the energy security in Europe.
For the time being, the companies that are connected with Russia are opposing to the joint purchases of gas. Eurogas, which gathers all of the gas concerns, spoke against this concept. The superiority was of the French and Germans. However, their opposition might be broken by firms, which are favorably disposed towards the joint purchase, such as the Spanish ones, and by the political will in the European capitals. Despite the opposition of GDF, the French president, Francois Hollande, supported the Polish idea of the Energy Union and the so-called joined gas purchases. We should keep our fingers crossed for the Russians who, by deepening the Ukrainian crisis, are only fueling the support for the Polish postulates. Their aggressive policies could persuade Europeans to deepen the energy solidarity, despite any particular business of their companies. In a pessimistic scenario, Russia will use these particular contracts to permanently destroy the solidarity of Europeans and set them against each other for its own gains. This trend is very alarming and especially visible in the context of South Stream.
Translation: Marlena Kister