Federal Chancellor Angela Merkel declared her readiness to invest money into its reconstruction, and announced a plan for this autumn to set up a bilateral economic forum, where this cooperation will be discussed in more detail, up to “Germany’s investment into restructuring of the Ukrainian gas market.” Its date is yet to be set.
This is yet another stage of a massive geopolitical negotiation process, which t Yanukovych has been trying to speed up just about from day one of his election.
Under his predecessor, Viktor Yushchenko, Ukraine lost initiative in asserting its national interests as a transit country of the Russian gas to the countries of Central and Western Europe, watching helplessly as on Dec. 9, 2005 the building of North Stream gas pipeline kicked off. Here is also another project, South Stream, which, according to Russia’s plans, has to start working in 2015.
These plans are hurting Ukraine a lot: as a result of their implementation, sooner or later it will end up, as the fairytale goes, “by the broken trough.” Or, in this case, with a rusty pipe.
During the election campaign in 2009-2010, Yanukovych and his rival, now Deputy Prime Minister Sergiy Tigipko, were the only ones who talked about creation of a Ukrainian-Russian gas transportation consortium. This was in sharp contrast with the position of national “professional patriots.” Some of them even said that Ukraine would need a referendum to decide the future of Ukraine’s gas transportation system.
Article 74 of the Ukrainian Constitution only clearly forbids referendums about taxes, budget and amnesties, meaning that there are no constitutional obstacles for this type of a referendum. Privatization of the gas transportation system is banned by separate law. But in case of creating a consortium, the law does not need to be changed, because it’s not privatization.
The idea of this consortium seemed to have been buried when, on May 18, Russian President Dmitry Medvedev announced in Kyiv that the “Russian side does not intend to reject alternative transportation of natural gas, in particular, the building of gas pipelines North Stream and South Stream, just to please Ukraine.”
This was the Russian reaction to multiple declarations of Ukraine’s leaders, including those of Yanukovych on March 22, that modernization of the Ukrainian gas transportation system is an alternative to South Stream. This was also a reaction to a joint declaration on modernization of Ukraine’s pipelines signed on March 23, in Brussels, which gave birth to the negotiation process to allocate a loan for Ukraine for this modernization.
Russia didn’t like it. On May 25, chief of the Russian gas company, Valery Yazev, declared that Ukraine’s pipelines can be modernized, even without the participation of the European Union.
In response, on May 26, Yanukovych, speaking after his negotiations with U.S. Secretary of State Hillary Clinton, made a new offer: “Ukraine is proposing the European Union and Russia to build through our territory an additional pipeline to increase the volume of gas transported to Europe,” for which it’s possible “to create a joint company with European Union, Russia and Ukraine.”
There has been no Russian reaction to this. On June 25, Fuel and Energy Minister Yuriy Boyko declared that “the issue of creating the Ukrainian-Russian gas transportation system is on the agenda at the moment.” He added that “Ukraine is building a model in which it would own the controlling share in any joint enterprise for gas transportation, which is being created on our territory. We need to have up to three participants for this company, since there are three components in his process: Russia as the owner of the resource, us as the transit country and Europe as the consumer.”
But Russia ignored this proposal also. Moreover, on July 12, Russian Gazprom officially invited the German concern RWE to take part in the Russian pipeline South Stream. This was a clear attack on the Ukraine’s supported alternative pipeline, Nabucco.
I am far from expecting Germany to react quickly to the current proposal of Yanukovych. Also, Kyiv is yet to develop a position in response to Germany’s offer to take part in restructuring of the Ukrainian gas market, which directly concerns the interests of the gas trading group RosUkrEnergo, close to the Party of Regions, as well as the owners of regional gas companies, oblgaz, tied to the Bloc of [ex-Prime Minister] Yulia Tymoshenko.
But Kyiv’s own proposal to modernize the Ukrainian gas transportation system with Berlin’s money affects the interests of the Kremlin, which needs to be taken into account, considering Russia’s monopoly position as a supplier.
But as a result of Yanukovych’s proposal, Germany received an opportunity to play with the Krem;in’s interests by regulating future supplies and streams, both the north and south ones bypassing Ukraine, as well as the Ukrainian pipelines. Judging by the sparkle in her eyes, it seems the federal chancellor understands this perfectly well.
Viacheslav Pikhovshek is a former chief editor of news on 1+1 TV channel. He was also speech writer for former President Leonid Kuchma. He can reached at [email protected].
