11 May, 2022
Ukraine’s blocking of Russian gas to Europe will hurt Russia, help the US dollar, and also decimate the industry of its European “allies”. At first sight it looks suicidal for the Ukrainian economy.
For decades Ukraine has relied on transit fees for gas passing through to Europe and campaigned for their continuance.
However Ukraine is now being pledged $40.ooo.ooo,000 from their US sponsors, and we can be sure that cutting Russian gas was one condition, destroying European competition into the bargain.
$40 billion is not so outrageous for the US as they have already a cumulative debt burden of $133.38 trillion in debt (Truth in Accounting March 2022), and it should cover the loss of transit fees.
Kiev cites “force majeure” to halt a third of Russian transited gas flow to Europe, while Gazprom says there have been no issues that would justify the move.
Russian gas conglomerate Gazprom has received no confirmation of force majeure or any obstacles to continued transit of gas through a junction in Lugansk Region, the company said on Tuesday, after Ukraine’s operator OGTSU announced it would halt further deliveries starting May 11, due to the presence of “Russian occupiers.”
Gas Transit Services of Ukraine (OGTSU) declared force majeure on Tuesday, saying that it was impossible to continue the transit of gas through a connection point and compressor station located in the Lugansk area. As OGTSU personnel “cannot carry out operational and technological control” over the Sokhranovka connector point and Novopskov compressor station, the company cannot continue to fulfill its contract obligations, it said.
Gas from this connection will not be accepted into the transit system of Ukraine starting at 7 am on Wednesday, OGTSU said. Sokhrankovka accounts for almost a third of the Russian gas that transits through Ukraine to Europe – up to 32.6 million cubic meters per day – according to the operators.
Gazprom has received no confirmation of force majeure or disruption of operations at Sokhranovka or Novopskov, company spokesman Sergey Kupriyanov said on Tuesday. He added that Ukrainian specialists have had full access to both facilities all along, and there had been no complaints about it previously.
Kupriyanov also said that Gazprom has been notified by Ukraine’s gas company Naftogaz that if Russia continues to supply gas through Sokhranovka, Kiev will reduce the volume at the point of exit by the same amount, effectively confiscating the gas.
While OGTSU has proposed to reroute the gas to Sudzha, a connector located in the Sumy region and controlled by the Ukrainian government, Kupriyanov said this was “technologically impossible.”
“The distribution of volumes is clearly spelled out in the cooperation agreement dated December 30, 2019, and the Ukrainian side is well aware of this,” he said.
Gazprom is fulfilling all of its obligations to its European customers, with all the transit services in accordance with the terms of the contract and paid in full, Kupriyanov pointed out. Moscow has continued gas deliveries to Europe, including transit through Ukraine, regardless of the ongoing military operation and the embargoes against Russia imposed by the US and its allies in the EU.