The transit of gas through Ukraine is too sensitive for Russia and Europe, at least ahead of the launch of Nord Stream 2. Until it is completed, the United States will continue to have the opportunity to discredit Russian gas supplies to Europe in order to promote its own LNG on the market.
On the eve of the first round of the presidential elections in Ukraine, the topic of Europe’s Russian gas supply once again came to the fore. Although the campaign itself has resembled a TV comedy show to outside observers, the issues requiring resolution are no laughing matter; they include the immediate fate of the energy security of the European Union.
As we know, the current transit contract between Russia’s Gazprom and the Ukrainian gas pipeline company Naftogaz will expire on 1 January 2020, at 10 a.m. This fuse could be re-lit and lead to a new gas transit “explosion”, disrupting Russian gas supplies to Europe. If a decade ago the European countries were being compelled to pursue large-scale state support for renewable energy, despite the inevitable accompanying hike in electricity prices for end users and negative consequences for the competitiveness of the EU economy, the motives of the current situation’s culprits are far more obvious.
But the fact of the matter is that the transit of gas through Ukraine is too sensitive for Russia and Europe, at least ahead of the launch of Nord Stream 2.
This would be easy to arrange – Washington would simply need to disrupt the negotiations and blame Russia. This tactic was tested in 2008.
The shortcomings of American LNG are widely known in Europe – it is too expensive and cannot honestly compete with Russian gas, especially amid fairly low prices. This applies both to supplies provided through Nord Stream 2 and through Ukraine. Therefore, from the point of view of the United States, the normal transit of Russian gas through the Ukrainian pipeline is detrimental to their interests in the European gas market, just like the supply via the Trans-Baltic pipeline. A disruption in gas transit before the entry into force of Nord Stream 2 would be a gift of fate, killing two birds with one stone: undermining the reputation of a competitor, and driving up prices on the market.