Ukraine Freedom Support Act May Stop Turkish Stream Project

According to the head of Gazprom Alexey Miller, Russia does not plan to extend its gas transit deal with Ukraine after the current contract expires in 2019 and European importers will have to buy Russian gas at the Turkish-Greece border.  For instance, contracts between Italian Eni and Gazprom assume deliveries of Russian gas to the northern border of Italy until 2035. Now Gazprom plans to move the delivery point far away and wants the importer to build a new 1500-km pipeline. Moreover, Alexey Miller threatens to turn off the gas flow if the transmission facilities are not ready by 2020.

As a matter of fact, Mr. Miller refers to the situation described in the Ukraine Freedom Support Act of 2014:

“If the President determines that Gazprom is withholding significant natural gas supplies from member countries of the North Atlantic Treaty Organization, or further withholds significant natural gas supplies from countries such as Ukraine, Georgia, or Moldova, the President shall, not later than 45 days after making that determination, impose the sanction described in subsection (c)(7) and at least one additional sanction described in subsection (c) with respect to Gazprom.”

So, “taking a break” in gas supplies to Italy and other member-states of NATO is very likely to lead to losing access to foreign financing.

Mikhail Korchemkin

Mikhail Korchemkin is with East European Gas Analysis, a Natural Gas Europe Partner