Putin Defends NS2, Few Signs of Ukraine Pledge
At a press conference concluding his meeting with the German chancellor Angela Merkel in Sochi, Russia's president Vladimir Putin said May 18 he was ready to discuss ways of continuing gas transits via Ukraine “if we see their economic viability.”
But the briefing gave no sense of whether Merkel had succeeded in securing any binding undertaking from Moscow to continue transits via Ukraine in return for allowing the Nord Stream 2 project to proceed – and indeed if NS2’s future is now more at risk. Merkel was invited to respond to the same question, but either chose not to or interpreted that the briefing had come to an end.
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Putin said that the US position was to oppose Nord Stream 2, partly to support Ukraine whatever, but also because Kiev receives $3bn of [annual] transit revenues from Gazprom.
As European production declines – notably at the Dutch Groningen field – Russian exports of gas could equal or exceed last year's 195bn m³ this year and following years, according to Gazprom Export head Elena Burmistrova; so some transit through Ukraine will have to continue post-2019 even if Nord Stream 2 and TurkStream 2 come online by then.
“We’re not against this and we are ready to keep transit flows through Ukraine if we see [their] economic viability. We’re ready for such talks,” Putin said in Russian through an interpreter.
Nord Stream 2 can be used to deliver to Germany, at a time when Norwegian and UK gas production is declining and while EU gas demand is increasing, the president said. But he claimed that Donald Trump was not just acting in his capacity as US president, but also in backing US business.
“He’s trying to promote US shale [LNG export] sales, but US gas is 30% more expensive than Russian piped gas. He is protecting US interests," Putin contended.
Merkel’s economy minister Peter Altmaier was in Moscow on May 15 but secured no deal to maintain Ukraine transits, with his Russian counterparts simply saying that a solution would be found.
The May 18 meeting between Putin and Merkel in Sochi also covered other topics such as the Iran nuclear deal and Syria.