Tag Archives: Russia

Europe’s Gas Crunch:  The Pending Crisis Around Nordstream 2 & Ukraine Transit

My public talk in Washington, 12 June:

pic_my_12jun_kennan_talk_european_gas_crisis

Despite Berlin and Moscow’s rush to make the Nordstream 2 (NS2) pipeline construction through the Baltic Sea a fait accompli, opposition from several EU states has stalled its completion. Meanwhile, Gazprom’s transit contract with Ukraine will expire in January and Moscow has put unacceptable preconditions on negotiating a new one. Once again, Europe must brace itself for a Russian gas-supply crisis. Professor Thomas O’Donnell will discuss European states’ various interests and heightened energy anxieties, the prospects for the NS2 pipeline, and Russia’s strategy.

Speaker:  Thomas O’Donnell, 

Instructor, Hertie School of Governance, Berlin;  Title VIII Short-term Scholar, Kennan Institute — Scholar’s Research-Project Page at Kennan

RSVP Now

Wednesday, June 12, 2019
2:00pm-3:00pm  –   5th Floor Conference Room

Directions

Wilson Center
Ronald Reagan Building and
International Trade Center
One Woodrow Wilson Plaza
1300 Pennsylvania, Ave., NW
Washington, D.C. 20004   Phone: 202.691.4000    kennan@wilsoncenter.org

Putin’s OPEC tactics: Iran sanctions and the Saudis [IBD cites me]

dc-Cover-p9fbkcs8ccuhvnnnubuhqc2fn7-20161201210531.Medi

June 2018 OPEC meeting’s key players (AP)

Last week, Gillian Rich at Investor’s Business Daily (Washington), asked me (Berlin) and others about the OPEC’s 20-21 June meeting. Below here, I give my views in more detail, including the tie-in to the Trump project to isolate Iran and my comment about Putin likely betraying the Iranians again.  The IBD piece is here: Trump Could Make OPEC’s Next Meeting As Dysfunctional As G-7 Summit. 15 June ’18.

We spoke about market and geopolitical aspects. On the latter, I emphasized both the Trump Administration’s evolving plan to sanction and isolate Iran, and Russia’s new role as a central player with OPEC ever since the 2016 joint Russian-OPEC decision to raise production.

That’s when Putin played a new role for any Russian leader. Not only did he coordinate Russian oil policy with OPEC’s, he got personally involved in heated discussions, getting on the phone late in the last night with Iranian and Saudi leaders to get the deal sealed. Continue reading

Pipe Dream? Polish ruling complicates Nord Stream 2 pipeline for Gazprom & EU partners [My Berlin Policy Journal piece]

bpj_online_odonnell_nordstream2_cutHere’s my latest analysis in Berlin Policy Journal (German Council on Foreign Relations -DGAP).Pipe Dream? The Nord Stream 2 pipeline project is in danger of being derailed.
THOMAS W. O’DONNELL , SEPTEMBER 22, 2016 

A pipeline project to double Gazprom’s export capacity to Europe has always been controversial. A recent ruling by Poland’s competition authority could seriously undercut the support it has accrued, leaving its European backers at odds.

The proposed Nord Stream 2 pipeline project has bitterly pitted European states that back the project, including Germany, the Netherlands, Austria, and France, against project opponents, including Ukraine, Poland, and other former Soviet-bloc states. The project aims to double the capacity of the existing huge, 55-billion-cubic-meter-per-year Nord Stream 1 pipeline, running in parallel to it under the Baltic Sea from near St. Petersburg in Russia directly to Greifswald in Germany.

This dispute has exposed two very different views of Gazprom, Russia’s state-owned gas-export monopoly, and of Vladimir Putin’s Russia itself – one side sees it as a “necessary” and “reliable” energy supplier, the other a dangerous and manipulative adversary. This dispute is but one more collision inflicting lasting harm on the European Project.

Polish competition authority rejects project

The latest row involves a ruling in late July by the Polish Office of Competition and Consumer Protection (Urzed Ochrony Konkurencji i Konsumentow, or UOKiK) rejecting an application by five private western European energy firms proposing to partner with Gazprom to build and operate Nord Stream 2. The firms are Germany’s E.ON (soon to be Uniper) and Wintershall, Austria’s OMV, Anglo-Dutch Shell, and France’s Engie.

Shortly before the Polish announcement, the five companies agreed to withdraw their association proposal to avoid UOKiK initiating a legal process against them. The commission’s president, Marek Niechcial, declared categorically on August 12 that the Polish rejection was definitive, asserting “This will stop the [Nord Stream 2] deal.” The five firms have nevertheless made it clear they are seeking a strategy to work around the decision, and expect to proceed as planned. Gazprom has said the same.

So why go through this proceeding in the first place? To understand these events better, I spoke with several experts and diplomats working on these matters in Moscow, Berlin, Washington, Paris, and Warsaw.

Commercial Arguments

An often-heard line of argument is that at least some of the five companies might actually have little commercial interest in the project, but need to preserve their relationships in Russia where they have large investments in energy projects. After all, the Kremlin has a track record of taking over projects from foreign partners with whom it has fallen out. A further theme in this vein is that Nord Stream 2 is not really needed in northwestern Europe, even though the Groningen field in the Netherlands and Norway’s reserves in the North Sea are declining, because future demand in northwestern Europe is overestimated and Liquefied Natural Gas (LNG) will be available from the United States. This view led to press speculation that the five firms likely welcomed the Polish decision, allowing them a graceful exit.

However, virtually all the experts I spoke with had no doubt Nord Stream 2 would be a lucrative commercial enterprise over the long run, and that the five firms seem genuinely enthusiastic. Continue reading

My IP JOURNAL article | EU’s “Stress Test” of a Russian gas cutoff: Official optimism?

EC's Gas Stress Test: Would solidarity suffice to cope with any concerted Russian use of gas as a geopolitical weapon?  REUTERS/Wojciech Kardas/Agencja Gazeta

EC’s Gas Stress Test: Could the EU cope with a Russian use of gas as a geopolitical weapon?  REUTERS/Wojciech Kardas/Agencja Gazeta

What if Russia cuts off gas exports to EU states this winter?  This is a very possible means for Russian President Putin to escalate pressure on the EU and USA over the future of Ukraine. What could the EU do? The European Commission has just released the results of a simulation it ordered, involving 38 EU and neighboring states.   Here’s my analysis for the IP Journal of The German Council on Foreign Relations: Continue reading