Results of Vladimir Putin’s visit to Kiev

There was no expected breakthrough in energy relations of the two states following a visit by the Russian prime minister to the Ukrainian capital. Representatives of the negotiating sides did not even appear at a final public press conference. Instead there was again an exchange of comments by experts in the mass media citing various high-ranking sources in the Russian and Ukrainian ruling circles.

The positions of Moscow and Kiev look as uncompromising as several months ago. To put it straight, Russia wants to achieve one concrete goal – to gain control over the Ukrainian gas transportation system through the creation of a joint venture with Naftogaz or an international consortium for managing Ukraine’s main pipelines. Gazprom intends to play a leading role both in the JV and the consortium. Ukraine desperately resists the idea of handing over its GTS to Gazprom and demands new discounts on gas it buys, in addition to the 30% discount it secured following the Kharkov accords. Simultaneously Ukraine tries to show that it is capable of solving its gas problems independently either by importing LNG in several years or producing gas on the shelf, or producing shale gas in the country with US assistance. Now there are leaks in the mass media about Kiev’s intention to implement the White Stream project whose lack of prospects seemed to be clear several years ago.

So far Ukraine is hinted it may preserve its transit status – after obtaining control over the GTS Russia may refuse South Stream although it will have to terminate agreements with its partners in Southern and Eastern Europe. But when South Stream’s implementation begins, Ukrainian politicians will have no chance to hinder this project and retain a transit status of their state.

By Stanislav Mitrakhovich, NESF leading expert