Ukraine's former prime minister Yulia Tymoshenko made public yesterday [January 5] the confidential text of the Russia-Ukraine gas agreement, signed on January 4 in Moscow. Three aspects that officials on both sides downplayed or omitted in their briefings stand out in the confidential text (UNIAN, January 5).
First, this is not just a bilateral interstate agreement, but has a third, co-equal signatory: RosUkrEnergo, an ostensibly private though shadowy offshoot of Gazprom. Second, Ukraine forfeits any possibility to import gas from Turkmenistan -- an option that Kyiv had pursued up to the last day in 2005. And, third, Naftohaz Ukrainy -- hitherto solely responsible for marketing all imported gas in Ukraine -- yields one half of that business to RosUkrEnergo.
Under the agreement, RosUkrEnergo shall purchase a staggering 41 billion cubic meters of Turkmen gas in 2006, plus 17 billion cubic meters of Russian gas, and resells the aggregate amount to Ukraine. The total figure of 58 billion cubic meters is also stipulated for 2007. On the Turkmen front, this means that Gazprom has locked in almost the entire volume available in Turkmenistan for export to Europe, as well as using up almost the entire capacity of the trunk pipeline out of Turkmenistan.
Read the rest here.
So, Russia took away the possibility of Turkmen gas supplies surplanting Gazprom. This looks like a closing of a potential loophool for Ukraine to jump through. I suspect that things will be interesting. If Russia wants to keep a low profile, yet try again with the gas card later, this was a wise move. This way they set the precident that Ukraine will buy gas from Gazprom at the desired price of $230. Then if the proposed Baltic gas line gets laid down, it can try again (even legally) in 5 years. It'll be post Putin (maybe), but...
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Many are labeling Russia’s pressure on Ukraine to pay market prices for natural gas as “Cold War” tactics. Of course, the Ukrainian government is paying the full price for their anti-Russian rhetoric and pro-Western orientation. Russia is flexing the only muscles she has: natural resources. But, it’s not so much a message to the Ukraine as to the West. And it’s not so much “Cold War” as Realist geo-politics.
Putin quickly realized that Russia only has one card to play in today’s world of growing demand for natural resources. Domestically, this realization became clear with the takeover of the Yukos oil company. Disguised as retribution for legal transgressions, Putin removed the threat of a western-oriented Yukos
by imprisoning its managers, and paved the way for a predictable government takeover of Russia’s oil industry. Today, it is not so clear what the rules of oil investment are (i.e. no foreigner shall hold majority stock in a Russian oil company), but it is very clear who makes the rules.
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