Ukraine’s state energy firm Naftogaz has said that its gas transit deal with Russia is under threat of not being renewed. Meanwhile, Gazprom – Russia’s state-owned gas company – has seen its profits skyrocket off the back of the EU’s energy crunch, which analysts say it has been responsible for orchestrating.
The company’s profits soared to 581billionn rubles (£5.8billion) compared with a loss for the same period last year ago on sales that soared by almost three-quarters to 2.37 trillion rubles, another record high.
It comes as the Kremlin still awaits the certification of the new Nord Stream 2 pipeline, that will transit gas from Russia into Germany, bypassing Ukraine and Poland.
Following the break-up of the Soviet Union, most Russian gas exports to the EU flowed through existing pipeline infrastructure in Ukraine.
But in the NIneties and Noughties, Russia sought to diversify its gas network and reduce its reliance on its neighbour, laying new pipelines through Belarus and Poland.
Russia has already been accused of decreasing supplies of gas to speed up certification, which was recently suspended, causing prices to spike in Europe.
Naftogaz CEO Yuriy Vitrenko said that it has no power to halt the Nord Stream 2 pipeline’s completion, despite its role in the certification process.
Mr Vitrenko said there is a chance that there will be no gas supplies from Russia through Ukraine beyond a 2024 deal as there have been no discussions with Russia about extending that deal.
He told Reuters: “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.”
Mr Vitrenko warned that If the deal is not renewed, reliance on the Nord Stream 1 and 2 pipelines direct to Germany, would strengthen Russia’s grip on Europe’s gas supplies.
It would leave the Kremlin in direct control of the flow of gas into the EU, of which the bloc relies on for roughly 40 percent of its imports.
He also warned that it and would make the EU more vulnerable to Vladimir Putin’s politically motivated supply disruptions and price spikes.
And while he claims he does not have the power to block certification of the pipeline, he is still willing to take action against Russia if the pipeline’s certification does comply with European law.
Mr Vitrenko said: “We hope it won’t 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.”
It comes as tension between Russia, Ukraine and NATO has been boiling up, with reports that over 90,000 Russian troops are being deployed to the Ukraine-Russia border.
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NATO foreign ministers met today to discuss how to counter Russia’s military build-up here.
NATO Secretary-General Jens Stoltenberg told AFP during a visit to alliance forces in Latvia: “There is no clarity about the Russian intentions but there is an unusual concentration of forces for the second time this year.
“We see heavy armour, drones, electronic warfare systems and tens of thousands of combat-ready troops.”
NATO and the US have now warned that an attack on Ukraine would be costly for Moscow.
Mr Stoltenberg said: “There will be a high price to pay for Russia if they once again use force against the independence of the nation, Ukraine.”
Britain has followed suit and back NATO’s warning.
British Foreign Secretary Liz Truss said: “We will stand with our fellow democracies against Russia’s malign activity.”