By Georgi Stankov, January 15, 2015
With its decision to cut immediately gas supplies to Ukraine by 60% and stop in the future any gas transport through this country in a civil war and turmoil, Russia has opened a new gambit in the political and economic warfare between the antagonistic world powers that has already checkmate the EU and subsequently the USA. This latest move of Putin, who was silent for a while, will undoubtedly increase the pressure on the criminal Western cabal to make their final, fatal move and be ousted from power. The plot is thickening now exponentially.
In addition, Russia has decided to unseal its $88 billion Reserve Fund and use it to acquire rubles. Russia may convert the equivalent of as much as 500 billion rubles from one of the government’s two sovereign wealth funds to support the national currency, Siljanov said, calling the ruble “undervalued.” The Finance Ministry last month started selling foreign currency remaining on the Treasury’s accounts.
The entire 500 billion rubles or part of the amount will be converted in January-February through the central bank, according to Deputy Finance Minister Alexey Moiseev. The Bank of Russia will determine the timing and method of the operation. This will be a huge blow to the dollar.
Yesterday on Wednesday the EU negotiated with Gazprom in Moscow. The EU negotiators had three aims:
1. Pressure Russia into extending the special winter pricing on gas supplies to Ukrainian due to end in March,
2. Force Russia to further unilateral concessions by forcing all European energy purchases to happen through a new “European Energy Union”,
3. Pressure Russia to resurrect the canceled South Stream gas pipeline project and build it in accordance with the restrictive rules of the Third Energy Package.
The Russian response was a cold shower.
Firstly, Gazprom said there is no need for a special summer agreement on Ukrainian gas purchases, as a valid contract already exists. In practice, this means that all the concessions Kiev has received for the winter season are temporary and there is no space for negotiations.
If the EU wants to ensure their gas transits through Ukraine then it must put pressure on Kiev to comply with existing agreements.
If Kiev needs gas it cannot afford to pay – thus endangering transit deliveries to EU countries – it is not Russia’s problem. The same applies to Kiev’s gas debts; the EU will have to pay both the Ukrainian gas debts and any future gas purchases.
Secondly, Gazprom announced that the South Stream gas pipeline project is dead and will not be realized. The project collapsed under US and EU pressure.
The greatest obstacle turned out to be EU’s Third Energy Package. It places heavy restrictions on how Gazprom could use its own pipeline; Gazprom could only use 50% of South Stream capacity and would have been forced to offer the remaining 50% to third parties.
Although all the agreements between Gazprom and the various transit and consumer countries were made before the Third Energy Package entered into force, the European Commission now demands that it is applied retroactively.
Russia’s solution is as follows: Gazprom will build the pipeline to Turkey and extend it to the Turkish-Greek border. The pipeline will end in a gas distribution hub near the EU border.
If the EU wants to buy gas, it will have to build a pipeline to Turkey at its own expense. It will also need to expand the gas transport capacity between its South European member countries – and do so under the constraints imposed by its own Third Energy Package.
The final punch to EU arrogance was Gazprom’s declaration that after the completion of the gas hub and the Turkish pipeline Gazprom will end all gas transit through Ukraine. Russian gas will only be available through Turkey!
The Ukrainian pipeline network will be used exclusively supply gas to Ukraine. Gazprom based its decision on Ukraine’s instability and the high transit risks.
Maroš Šefčovič, the week-old European Commissioner for Energy Union must have had the worst day of his life. EU arrogance hit a brick wall.
A major scandal is brewing about how Germany ruthlessly secured its own gas supply through the Nord Stream Pipeline and then used all means possible to sabotage the South Stream pipeline.
There is no surer way to inflame the North-South conflict in the EU. The prospective users of the South Stream pipeline are sure to feel “eternal gratitude” to the United States for killing the project.
The perpetual EU candidate Turkey will feel Schadenfreude watching the EU’s plight while calculating the future revenues from gas transits. Turkey also happens to be Gazprom’s second-largest customer after Germany. The biggest loser will be Ukraine, the world’s preeminent gas siphoner and blackmailer.
Despite all the arrogant talk the EU has no real alternative to Russian natural gas. Brussels has to swallow it pride and come to its senses.
Now we are anxiously waiting for the Western mainstream media’s spin on the story.