Moscow is determined to preserve overland transit routes through Ukraine for natural gas shipments traveling from Russia to Europe, not letting geopolitical and legal disputes involving Nord Stream-2 throw plans off track.
“Speaking of the Nord Stream-2, Mr. President [Trump] voiced his concerns about the possibility of disappearance of transit through Ukraine,” Russia’s President Vladimir Putin said in Helsinki during his press conference with Donald Trump on July 16.
“I reassured Mr. President that Russia stands ready to maintain this transit,” Putin said.
Putin emphasized that further energy cooperation with Ukraine is possible in case the long-standing dispute between Naftogaz and Gazprom is settled. If that happens, Gazprom will extend the current gas transit contract with Naftogaz that was signed in 2009 for a 10-year period.
The $11 billion Nord Stream-2 project, which is supposed to go into operation next year, is a dual pipeline that could deliver 110 billion cubic meters (bcm) of Russian natural gas to Europe annually. Ukraine, which has had a monopoly on gas transit due to decades-old overland routes passing through its territory, is afraid of losing transit revenues.
The director of the International Institute of the Newly Established States, Alexey Martynov, told Caspian News that gas transit through Ukraine is fraught with geopolitical complexities, which is why European leaders have been looking for alternate routes.
“Since 2005, Ukraine has constantly blackmailed Europe with its pipeline, which they inherited from the Soviet Union,” said Martynov, who predicts dire economic consequences for Kiev if Russia turns off the spicket.
“In the case of a final refusal for transit through Ukraine, the country will see a default of its economy within a month, with all the consequences. It will inevitably turn into another political crisis and the further disintegration of the state,” added Martynov.
Ukraine is not the only critic of Nord Stream-2, however.
The United States has consistently criticized Europe for it and has threatened to impose sanction on countries that would be involved in the project, including American allies.
After the joint press conference in Helsinki, Trump said Germany has a right to participate in the Nord Stream-2 project, but stressed that cooperation with Gazprom could create difficulties, given Germany’s membership in NATO.
"We are going to be selling LNG [liquified natural gas] and will have to be competing with the [Nord Stream 2] pipeline and I think we'll compete successfully, although there is a little advantage locationally," Trump said in an interview with Fox News.
Alexey Martynov said it is obvious that Trump wants to get a slice of the European energy market for American LNG.
“At least, Trump wants to participate in controlling this market and regulating prices. He has enough tools for this, from NATO to direct sectoral trade wars with the EU,” he said.
Trump has been a fierce critic of Germany’s dealings with Russia related to energy and the Nord Stream-2 project.
At meeting with NATO Secretary General Jens Stoltenberg in Brussels last week Trump blasted Germany for being “totally controlled” by Moscow for “making massive oil and gas deals with Russia.” Trump urged the German government to abandon the Nord Stream-2 project in favor of a trade deal with Washington.