The new US sanctions against Russia reportedly create the risk of weakening Russian gas monopoly Gazprom’s position in talks with Ukraine on tariffs for gas transit, Moody’s rating agency has said.
US President Donald Trump in early August signed a law that envisions the expansion of a number of sanctions against the Russian economy.
“The sanctions law comes as Gazprom’s gas transit agreement with Ukraine expires at the end of 2019, and risks weakening the company’s negotiating power as it looks to strike a new agreement. A weaker negotiating stance could result in Gazprom incurring higher transit expenses because of higher transit fees and/or volumes than its initial estimates,” the statement said, cited by Reuters.
Moody’s said the new US sanctions law has the potential to challenge Gazprom’s ability to structure the Nord Stream-2 pipeline construction on a project-finance basis, as the company had initially planned, replacing part of the debt it borrowed, including from its partners, with longer-term loans in a cost-efficient manner.
This law exposes Gazprom’s partners, investors, lenders and contractors to sanctions and risks that would delay the completion of both Nord Stream-2 and Turkish Stream projects, Moody’s said.
Russia and some European states, including Germany, have said that US sanctions against Russia could harm European companies’ interests in Nord Stream-2.
In the latest effort to deal with US sanctions, Russian President Vladimir Putin nominated former German chancellor Gerhard Schroeder to the board of Russian oil giant Rosneft as an independent director, according to a government decree published late on August 11. Schroeder is currently the chairman of the shareholders’ committee of Nord Stream AG. Schroeder has criticised moves to impose sanctions on Russia.
Meanwhile, Gazprom is moving ahead with plans to build the Nord Stream-2 and Turkish Stream pipelines that would lessen the Russian gas monopoly’s reliance on Ukraine as a gas transit state.
Igor Mantsurov, director of the Research Institute for System Statistical Studies, told New Europe that one of the most important requirements for Ukraine from the European Union was secure gas transit from Russia via its territory for European consumers according to contract conditions. “And Ukrainian government managed it successfully, although climatic and economic conditions were unusually harsh for the country,” he said.
“Ukraine secured natural gas flow to EU, effectively using its gas transportation network and storages to increase the supply in winter, at the time of highest consumption, when Russian suppliers fail to keep the necessary pressure of the transit gas flow,” added Mantsurov, who is a member of Ukrainian Academy of Sciences.
“High reliability of Ukrainian gas transportation system and solid policy of its government made unnecessary the construction of new pipelines bypassing Ukraine, because the usage of the existing Ukrainian network is much more profitable and could be omitted only by the political reasons,” Mantsurov argued.
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