Ukraine–Nord Stream 2: Struggle Over Gas Transit

Ukraine–Nord Stream 2: Struggle Over Gas Transit

Written on 01/15/2019



  • The Nord Stream 2 natural gas pipeline project is primarily perceived in terms of a political venture that goes against basic EU principles and poses threat to European solidarity. It was backed by Chancellor Angela Merkel and the German government despite objections from some of EU and NATO member states and from the European Commission, not to mention possible negative consequences for Ukraine. Further, Russia’s gas giant Gazprom never took into account purely economic calculations, serving first and foremost as a tool to implement Moscow’s policy. This is to be exemplified by the firm’s reaction to its significant defeat in legal dispute with Ukraine’s Naftogaz.
  • When constructing Nord Stream 2 and Turkish Stream, Russia aims to make Europe dependent on its gas supplies while weakening position of such transit countries as Ukraine, Belarus, Poland and Slovakia. Ultimately, the pipeline running alongside the Baltic Sea may transform countries located between Germany and Russia into their gas condominium.
  • In addition, the project constitutes an integral element of Moscow’s policy targeted towards the Ukrainian state whose long-time strategic goal is to eliminate Ukraine from the European gas transit network and to weaken the state, also by hitting its budget. Nord Stream 2’s political, economic and security consequences will be most suffered by Ukraine as it is estimated that charges deriving from the pipeline’s launch may make up to 3 percent of its gross domestic product. If obtained, the possibility to resign from gas transit to the European Union via Ukraine removes one of many obstacles to Russia’s aggression in Kiev.
  • Since November 25, 2015, Ukraine has no longer imported Russian gas; instead, all supplies that enter Ukraine’s gas network from the east are intended to be transferred westwards. Not incidentally, the date of the pipeline’s completion coincides with the expiration of the gas transit contract through Ukrainian territory. The current transit contract between Ukraine and Russia is bound to expire in December 2019 while Nord Stream 2 and Turkish Stream should be completed at the same time. Their total capacity is expected to correspond to gas volumes transported through Ukraine in 2017.
  • Nonetheless, it cannot be fully exploited even if all deadlines are met, making the pipeline operational in 2019. Instead, this is likely to happen no sooner than three years later. Moreover, given the due date for completing the second string of Turkish Stream, Gazprom will not be able to resign from transporting gas supplies through Ukraine until 2024, the more so that full withdrawal is doubtful. One should also bear in mind such factors and increase in demand in Europe, Russia’s possible new sources of natural gas and a possibility to use Ukrainian pipelines in case of problems related to the exploitation of Nord Stream or Yamal-Europe pipelines.


Photo source: UTG.UA

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