Turkey, Russia sign gas deal to bypass Ukraine
Turkey and Russia signed an agreement this week to build two gas pipelines across the Black Sea to Turkey, potentially opening up another route for gas to circumvent Ukraine.
If implemented, TurkStream would see Russia send 30 billion cubic meters of gas to Turkey each year via two separate pipelines. One will move gas to Turkish consumers, while another would send gas on to customers in Europe.
Though the current agreement only envisions 30 bcm of gas moving towards Turkey, further capacity could eliminate Russia’s need to move gas across Ukraine, an arrangement that has proved politically and economically beneficial to Kyiv.
TurkStream originally had a planned capacity of 60 bcm of gas each year. Given that Russia now transports between 50 and 60 bcm of gas annually through Ukraine, full implementation of the Gazprom-operated project could be a serious blow to the country.
The TurkStream pipeline could see Ukraine lose more of its share of the transport of Russian gas.
The Soviet-era pipelines that stretch across Ukraine are capable of carrying 100 bcm of gas each year.
In recent years, Russian efforts to build new pipelines through Belarus and the Baltic Sea have reduced its reliance on Ukraine.
The recent warming of relations between Russia and Turkey follows nearly a year of tensions after Turkey shot down a Russian jet that strayed into its airspace.
Mriya reports more stolen equipment
Troubled agro holding Mriya reported this week that corporate raiders are continuing to steal property from the company.
The firm, which is in the process of agreeing with international creditors to a debt restructuring that would see it pay back $330 million of a total $1.1 billion debt, is fighting off an attempt from the company’s former owners to take control of Mriya property.
The stolen property in question involves around 40 pieces of equipment from a Ternopil oblast logistics center currently under the control of a former lawyer at the company, worth around $3 million.
Though the equipment’s low relative value makes the issue more of a headache than anything else for Mriya, the issue is seen as a test for the government’s ability to defend the rights of foreign investors.
Out of that $1.1 billion sum, nearly $400 million was allegedly stolen by the company’s former owners, the Huta family.
The creditors committee were able to install new management, which brought the company out of the black after the Hutas fled. Ukrainian law enforcement has launched a criminal case against Ivan Huta, while Mriya has sued to regain control of the Ternopil oblast logistics facility.
But the company’s efforts to recover its property have been slowed by a recent Kyiv appellate court decision, which overturned a previous freezing order that would have returned the equipment to the company, while no arrests have been made of the Huta family more than two years after the fraud was revealed. Thatis in spite of reports suggesting that they are in Ukraine.
Advancing industrial development in Ukraine
The Cabinet of Ministers has established a new committee tasked with advancing industrial development in Ukraine.
The Industrial Development Committee was formed with the aim of developing the manufacturing sector and to boost Ukrainian production of high value-added goods, as well as moving the economy away from a model dependent on resource extraction.
Prime Minister Volodymyr Groysman said that if this work was carried out successfully, it could lead to the creation of tens of thousands new jobs in the industrial sector.
He said the committee should become a tool for identifying problems and working out solutions within national industries.
Alongside the committee, the government also decided to set up a special Deputy Minister’s Office for economic development, trade, and industry, with a ministry department being dedicated to supporting industrial development.
Empire State Capital researcher Tantely Ratovohery argued that the move is an “obvious answer to the many criticisms about the lack of a clear cut industrial and economic model in the country,” albeit one that is slightly late.
“Though opportune in its essence, we think that the decision is a little belated, leaving the recent germs of industrial and economic growth without the necessary direction for some more time,” Ratovohery wrote in a research note.
“In the meantime, any real implementation of the concept will be a convincing argument towards the rehabilitation of the country’s eastern industrial legacy, and especially the Donbas and Dnipro’s industrial regions.”
