Exclusive-Ukraine's Naftogaz says Russia-EU gas transit deal may not be renewed

© Reuters. FILE PHOTO: The logo of the Nord Stream 2 gas pipeline project is seen on a pipe at the Chelyabinsk pipe rolling plant in Chelyabinsk, Russia, February 26, 2020. REUTERS/Maxim Shemetov/File Photo

By Susanna Twidale

LONDON (Reuters) – Ukraine’s state energy firm Naftogaz has no power to halt the Nord Stream 2 pipeline being built between Russia and Germany, despite its role in the certification process, while its own transit deal with Russia may not be renewed, Naftogaz head Yuriy Vitrenko told Reuters on Monday.

Amid an energy crunch in Europe which has seen record gas price across the bloc, the market is closely watching for the signs whether the German authorities would be ready to certify soon the Nord Stream 2 pipeline that will carry more Russian gas to Europe’s biggest economy – something Moscow has said should help to bring prices down.

It would bypass transit countries, particularly Ukraine, which has a history of gas pricing standoffs with Moscow, and with which Russia has a gas transit deal until 2024.

Vitrenko said it is possible there will be no gas supplies from Russia through the route beyond that date as there have been no discussions with Russia about extending the deal.

“There’s nothing, not even a hint, no official or unofficial talks, (with Russia)… we are discussing it with the Americans and the Germans that all of us would like the transit to continue, but the Russians are reluctant to start these discussions,” he said.

If the deal is not renewed, he said reliance on the Nord Stream 1 and 2 pipelines direct to Germany, would tighten Russia’s grip on Europe’s gas supplies, making the bloc more vulnerable to politically motivated supply disruptions and price spikes.

Germany’s energy regulator earlier this month suspended the approval process for the new Nord Stream 2 pipeline and said the Swiss-based consortium behind the project first needed to form a German subsidiary company under German law to secure an operating licence.

The regulator also granted a Ukrainian request to be included as part of the certification process..

This, Vitrenko said, means Ukraine has some access to documents submitted and has the right to be heard on the process but does not give it any power to halt its ultimate certification.

“There is no veto power whatsoever,” he said.

He said Ukraine would be willing to challenge any ultimate certification of the project if it does not believe the project complies with European law.

“We hope it wont happen, but if it happens they certify it without full compliance with the spirit of the letter of European law then of course we will go to court,” Vitrenko said.

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