We live in a world kept in a state of perpetual information overload, where we are constantly updated by Twitter feeds, 24 hour news channels, blogs and tumblrs, and connected to each other by smartphones, apps, texts, emails and more. So it comes as a surprise that Polish Premier Donald Tusk was not in the loop when it emerged that a preliminary agreement had been signed between Russia and Poland for the expansion of a natural gas pipeline across Polish territory. Tusk was unaware of any negotiations between state-controlled gas and pipeline operators and had not been consulted about the potential deal to extend the Yamal pipeline. He promptly relieved the Treasury Minister of his position in the government and put out a statement explaining that the government had not supervised the deal, and that “strategically speaking, we do not want to expand the pool of Russian gas”.
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Apparently, neither the Premier nor his then Treasurer Mikolaj Budzanowski were informed about talks between Gazprom and EurRoPol Gaz, nor did they know about the two parties signing an MOU to add a new leg to the Yamal pipeline. This new branch of the Yamal pipeline would carry Russian gas south from Poland to Slovakia and Hungary.
Tusk’s assertion that Poland does not wish to act as an additional transit route for Gazprom reflects the widespread scepticism in Poland over Russia’s gas policies, particularly its attempts to manipulate or bypass its neighbour Ukraine. Pipelines flowing west from Russia already operate at less than full capacity, a bad sign for any new pipeline leg, and Poland is fully aware how it could be used as an alternative transit pathway instead of the Ukraine.
Russia’s dealings with former Soviet state Ukraine are complicated and often heavy-handed: disputes over gas prices and payments, not to mention shut-offs, are common once or twice a year and Ukraine pays a high price for gas in a long-term agreement with Moscow.
Tusk stressed that, for the Polish people, “gas is not a political instrument and we’d really like, according to European Union rules, that gas questions be free of politics.”
In an effort to acquire Russian gas at a lower price than its 2009 deal with Moscow allows, Ukraine has been using its vast gas pipeline network in reverse; importing Russian gas back in from Europe and paying spot gas prices for the privilege (these are, at present, lower than Russia’s price for Ukraine, although EU spot prices are rising). The east-west flow into Ukraine has reduced Russian gas imports by a quarter at the beginning of 2013. Ukraine is also eyeing similar reverse flow deals with Poland, Slovakia and Romania.
Gazprom head Alexey Miller alleges that Kiev’s purchases from Hungary are in effect Russian gas immediately resold to Ukraine right after crossing the border. Miller called the scheme “fraud”. In response, a source in the Ukrainian Energy and Coal Industry Ministry said: “We do not see any law violation here. The gas goes abroad and then it’s being returned to Ukraine by its new owner.” It seems many countries find it increasingly beneficial, and, perhaps more importantly, increasingly viable, to turn towards Europe rather than remain dependant on Russia.
One country seeking out Russian help is Egypt, which has asked Russia to help it fulfil its gas supply contracts with Europe, following a decline in oil and gas production, added to economic and social turmoil. Egypt needs the gas it is supposed to ship abroad for growing domestic consumption, so Russia could pick up the shortfall with a supply swap. In return, Egypt has offered some Russian companies (Gazprom, Gazprom Neft, Lukoil, Novatek) opportunities to explore its offshore oil and gas sector.
Meanwhile, Russia continues to look east for future growth; planning a US$ 150 billion LNG project to supply Asia-Pacific markets, seeking out new allies to replace those that slip, or claw themselves, away.