Press review: Can the US stop Nord Stream-2 and Russia, Ukraine reach gas transit deal / News / News agency Inforos
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Press review: Can the US stop Nord Stream-2 and Russia, Ukraine reach gas transit deal

Press review: Can the US stop Nord Stream-2 and Russia, Ukraine reach gas transit deal

Top stories in the Russian press on Monday, December 23, prepared by TASS

Izvestia: New US sanctions against Nord Stream-2 might hold up pipeline’s launch

Nord Stream-2 will be completed whatever the case might be and Russia will continue to further implement its economic projects in spite of all sanctions, the Russian Foreign Ministry said commenting on the new economic restrictions by the United States. At the same time, Foreign Minister Sergey Lavrov vowed retaliation to the US sanctions. Moreover, the European Union is extremely interested in launching the pipeline, and it perfectly "understands its commercial interest". Industry experts interviewed by Izvestia agree, saying that the project just had to make an emergency break due to the US sanctions.

The US attempt to stonewall the construction of the Nord Stream 2 gas pipeline at the eleventh hour will not succeed, experts interviewed by Izvestia believe. Although Washington has already achieved a temporary success. On December 21, the Switzerland-based construction contractor, Allseas, announced it was suspending pipelaying activities to get further clarification on the legal, technical and environmental aspects of the sanctions.

Head of AMarkets analytical department Artem Deev told the newspaper he believes that Washington’s restrictions this time do not directly affect Russia, but European business, so Moscow isn’t the only one defending the construction companies involved. Berlin has already taken a stand against the US sanctions. "The Europeans really need the gas pipeline, even Denmark, who is unyielding, has realized this," the expert told Izvestia.

Reverberations could affect TurkStream, set to be launched on January 8, 2020, though minimally. Nord Stream 2, however, has not yet been finished, but the completion of the project cannot be stopped, experts believe. "I think that first and foremost diplomats and lawyers will work here. Usually, sanctions relate to new agreements, because the law has no retroactive effect … Therefore, it is possible that the imposed sanctions will not impede the completion of the construction," Director of the Department of the RAS’ Institute for Energy Research Vyacheslav Kulagin told Izvestia. According to the expert, despite the existing risks, it will not be possible to completely halt the project, since Russia itself has enough ships that can complete a small section. The newspaper added that after a risk assessment, the European contractors might even resume work.

Izvestia: Russia and Ukraine reach five-year gas transit deal

Kiev and Moscow have agreed on gas transit to Europe for five years with an option for a 10-year extension, after two-day-long talks held in Berlin and Minsk on December 19-20. The agreements reached were a difficult compromise, experts told Izvestia. However, this deal gave Moscow the opportunity to build a reputation as a reliable supplier after the oil contamination incident in the Druzhba pipeline. During the negotiations, Gazprom probably had to make concessions in terms of pumping volumes, while Ukraine had to compromise on the transit price, the newspaper wrote. At the same time, it is still not clear how much the deal is financially beneficial for each of the parties, as the tariffs are classified.

With Russia, Ukraine and the EU striking the deal in principle on Friday and Saturday in Berlin and Minsk, gas transit through the territory of Ukraine will continue from January 1, 2020. According to the minutes of the meeting, which Izvestia reviewed, several major agreements will be concluded within the next week. According to the signed protocol, Gazprom is obliged to pay off $2.9 bln in debt to Naftogaz before December 29, 2019. The parties will abandon all arbitration and legal claims against each other, including lawsuits by the Ukrainian company for $12.2 bln and 1.33 bln cubic meters of gas. Seizure of Gazprom’s property, assets and funds will also be lifted and the parties will back off of any new claims. After that, a five-year contract will be signed, in which the minimum guaranteed transit volume will be set.

Senior analyst at BCS Premier Sergey Suverov deems it vital, saying: "This gives the Russian company (Gazprom) the opportunity to delay commissioning of a new gas pipeline. The launch date for Nord Stream 2 is no longer critical. It will be introduced in May or in October - it doesn’t matter anymore," the expert noted.

According to the expert, it will be clear how beneficial the deal is to Gazprom only after the transit price is announced. But overall, it is a compromise and a bargain, he said.

In general, none of the negotiators lost, Director of the Department of the Institute for Energy Research of the RAS Vyacheslav Kulagin told Izvestia. "Europe will receive guaranteed gas supplies, and Russia

Nezavisimaya Gazeta: Deeper integration between Belarus and Russia at risk

After his meeting with Russian President Vladimir Putin, President of Belarus Alexander Lukashenko said that the parties were satisfied with the results. Lukashenko claimed that Moscow and Minsk have “conceptually” agreed on energy supplies. Prices for Belarus at least will not increase. Meanwhile, regarding the essence of the specific results, experts interviewed by Nezavisimaya Gazeta believe that integration between the two states this year will not be deepened.

Lukashenko did not comment on negotiations on deepening integration, thus, there is reason to say that Belarus was not able to reduce the price of gas from the current $127 per tonne to $100, according to the newspaper. In matters of oil, the stumbling block was compensation for Belarus on its losses from the Russian tax maneuver, which might not be completely resolved in the near future, the newspaper wrote. According to the Belarusian leader, there are no specific plans for further negotiations between Moscow and Minsk.

In the absence of strategic agreements, the parties will be forced to accept a temporary option. Otherwise, from the beginning of the year, Belarus may be left without gas, experts told Nezavisimaya Gazeta. “I think that a certain program will be signed at the very least. Minsk is unlikely to simply refuse to sign anything at all,” political analyst Yuri Drakohrust told the newspaper. However, the process will be lengthy and painful. “These negotiations will be drawn out and Russian support will decline,” he said.

There is a decisive moment in relations between Minsk and Moscow, political analyst Alexander Klaskovsky told Nezavisimaya Gazeta. “If Russian support is diminished, then the Belarusian leadership has no reason to be zealous in terms of ‘deepening integration’,” he said. In this situation, the safest way to maintain sovereignty would be to preserve allied relations, and then later shape an economic model that does not depend on Russian subsidies.

Nezavisimaya Gazeta: US sabotaging Assad’s oil and gas

On Saturday, Syria’s oil and gas facilities were subjected to massive air attacks by unidentified drones. Minister of Oil and Mineral Resources Ali Ghanem told reporters that because of the bombing, production equipment at the Homs refinery, and two more oil and gas facilities were damaged. The Syrian leadership and experts believe that the United States is behind the assaults on the country’s key industrial enterprises, pointing out that it relentlessly seeks to destroy the regime of Bashar Assad, Nezavisimaya Gazeta wrote.

The oil refinery in Homs, restored with the help of Russian specialists in 2018, is capable of producing materials extremely vital for the use of combat aircraft, helicopters and armored vehicles. Any incapacitation of the refinery would be a major obstacle for an offensive by the Syrian forces in the Idlib de-escalation zone, the newspaper wrote. However, it is unlikely to happen, as the main assistants to Damascus in solving these problems, will be Russia and its other allies, experts told Nezavisimaya Gazeta.

 “I am sure that the refineries will quickly be restored, and the Syrian air defense with the help of Russian specialists will be strengthened to provide cover that will be enhanced to key industrial facilities in the country. To some extent, problems with delivering fuel and lubricants to the Syrian military can be solved by Iran and Russia,” military expert Lieutenant General Yuri Netkachev told the newspaper.

The expert noted that the Homs refinery could receive hydrocarbons from Syrian fields located to the east of the Euphrates, but this territory is occupied by the United States. “Military measures cannot solve this problem. Negotiations are needed, including the participation of the international community,” he said.

“Russia is providing significant assistance to Syria, not just military, but also economic (aid),” military expert Colonel Shamil Gareev told the newspaper. Thus, Russia’s plans to restore Syria are long-term. Meanwhile, through hybrid warfare, the United States and its allies can seriously hinder the peaceful re-building of Syria, the newspaper wrote. According to Nezavisimaya Gazeta, in order to prevent this from happening, an effective and dynamic solution not just for military, but also humanitarian, political problems in this country is necessary.

Vedomosti: Russia’s CIS partners criticize law on pre-installed software

On December 13, EAEU member states met to oppose amendments obligating the pre-installation of Russian software on mobile devices, computers and smart TVs, Vedomosti wrote referring to the minutes of the meeting.

According to the representatives from Kyrgyzstan, Belarus and Kazakhstan, the amendments contradict the union agreement, the WTO’s general agreement on trade in services and the Technical Regulations of the Customs Union, and may limit the circulation of technically complex goods from other EAEU countries to Russia. The amendments may also impede the functioning of the union’s internal market.

The participants decided that in order to enforce the law, after amending it, it is necessary to establish technical requirements for pre-installed software and create a list for it.

“The list of technically complex products and Russian programs that must be pre-installed on them will be approved by the government,” Head of the “EAEU Digital Transformation Competency Center” at the Government’s Analytical Center Anatoly Sheludyakov told Vedomosti.

The amended law does not prohibit the installation of foreign programs, including those originating from EAEU states, Sheludyakov added. The purpose of the law is to give Russian consumers the opportunity to use devices immediately after purchase, he said. According to the expert, the law does not violate Russia's WTO or EAEU obligations.

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