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    Ukraine welcomes US sanctions on NS2

Summary

Now the Senate must approve a draft defence budget that includes NS2 language.

by: William Powell

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Complimentary, Natural Gas & LNG News, Europe, Corporate, Political, TSO, Infrastructure, News By Country, Russia, Ukraine, United States

Ukraine welcomes US sanctions on NS2

Naftogaz Ukrainy on September 23 expressed gratitude to the US, whose Congress passed a provision that imposes mandatory sanctions on companies and people dealing with the planning, construction and operation of the Nord Stream 2 natural gas pipeline. The provision was part of congressional amendments to the US defence budget.

Naftogaz CEO Yury Vitrenko was part of the presidential visit to Washington in early September, where he was expecting to lobby for further sanctions to prevent Nord Stream 2.

“Ukraine’s position has been endorsed by the US House of Representatives. It is now the turn of the Senate. I would like to thank everyone who fights against Nord Stream 2 and the use of natural gas by the Putin regime as a weapon against Ukraine and Europe as a whole. Let’s conntinue our common efforts to maintain the pressure,” Vitrenko said.

Ukraine sees the commercial launch of NS 2 as a "real threat to the energy security of Europe and, more specifically, Ukraine. The pipeline undermines European solidarity, facilitates the export of corruption, and contravenes US national interests and the interests of the entire free world," he said.

However, the same day, on the company's Russian-language website, Vitrenko also blamed Russian energy company Gazprom for blackmailing Europe by not flowing more gas westwards through Ukraine. He said that the strategy would only worsen Europe's gas shortage, sending prices for spot gas spiralling upwards. This could be a lever to encourage Europe to grant Nord Stream 2 whatever concessions were necessary to start gas flows.

Gazprom could materially increase deliveries, he said: all it has to do was to offer gas for sale at the Ukraine-Russia border. European companies could then book transit westwards, he said. But Gazprom preferred to exploit its dominant position as a seller.

Gazprom, however, has been meeting high gas demand at home, both for heating and for storage injections, and as a state company it has to meet those obligations before exports. Gazprom is also free to decide whether to lower spot prices in Europe by selling more gas and so lower the price of those hub-indexed volumes; or to persuade buyers in the future to sign long-term contracts needed to underpin the costly front-loaded upstream investments.