Putin’s Gambit: Germany To Replace Ukraine as Russian Gas Transiter
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On video’s image: Russian President Vladimir Putin speaks during a session of the St. Petersburg International Economic Forum 2015 (SPIEF 2015) in St. Petersburg, Russia, June 19, 2015
For those who prefer to read, below is the written version
(the video above contains additional relevant maps and pics)
A Latvian politician and member of Europarliament has told me that he recalls how several years ago any session of the EU-Russia Europarliament Commission would be packed because of the overwhelming interest in doing business with Russia. Everyone understood: that’s where the opportunity was. At the same time, sessions of the US-EU Commission would barely have a few people attending. Those days several years ago now seem to the EU like another lifetime. Events in Ukraine and anti-Russian sanctions changed perceptions and put a visible wedge between Russia and EU – a setback used by the US to continue pushing EU to accept the increase in its military presence, its LNG shale gas and its secret Transatlantic Trade Agreement.
I know what US apologists both sides of the Atlantic will say: it’s the EU people who demand our increased military presence, shale gas and Transatlantic Trade Agreement. I suppose the EU people also demand that NSA wiretap their presidents and business elites, along with every citizen. I suppose the EU people also demand to be robbed blind.
Seemingly, US can celebrate a victory. Seemingly, they have achieved their goals. However, per my 2014 predictions, this victory will be short-lived, followed by a huge reversal.
The top event of last week was the St. Petersburg Economic Forum, yet what happened there went almost unnoticed in the manipulated Western media, busy covering up the new French NSA spying scandal with a fresh dollop of Russia-bashing. According to the Russian Foreign Ministry, the moment the news that NSA spied on three French presidents broke up, French papers filled with anti-Russian propaganda, blaming Russia for not observing the Minsk peace agreements. Similar thing happened in Germany, where the public is still reeling from last year’s massive NSA spying scandal. Obviously, the news filled with bad Russia and bad Putin, their convenient boogeyman, are meant to distract from the real news.
It should now be clear beyond the shadow of a doubt who controls ALL of the world’s media, except some news outlets in Russia, China and a few other countries. The fact that French and German media immediately jumped to protect their real Transatlantic employer once the scandal against such employer broke out – speaks volumes. The prime directive of the Western MSM is to divert the sheeple’s attention and pull the wool over their eyes every time their puppeteer is in trouble.
What happened in St. Pete was sensational, and therefore, it should have been the stuff of front pages. Instead, it was shyly relegated to the back pages, or avoided altogether.
But at the same time as US and Brussels continued selling their naive populace the stale story of Russia’s isolation – and Russian aggression – a virtual fight over who would become a bigger and better partner for Russian gas transit was taking place in St. Petersburg.
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In light of what’s happening in Greece, what’s especially interesting is this: Greek PM Tsipras neglected his scheduled meeting with EU leaders, in which he was supposed to negotiate his country’s crucial pre-default debt restructuring. Instead, he chose to come to St. Pete, where he signed a $2 bln joint venture for building the Greek leg of Turkish Stream to southeastern Europe.
Nord Stream-2: Analysis and Prediction
Less noticed and very under-the-wraps was another mega-deal: potentially even bigger than Turkish Stream. During the St. Petersburg Forum Germany and Russia agreed to build Nord Stream-2, to deliver gas across the bottom of the Baltic Sea directly to Germany, for further distribution throughout the EU. Nord Stream-1 consisted of two branches and cost 8.5 bln euro. Nord Stream-2 will add two more branches, for a total of four, and will cost 9.9 bln euro.
Nord Stream – Rusian gas goes directly to Germany via Baltic Sea
The new pipeline will go on top of the existing Nord Stream. This means that, due to the same footprint, Nord Stream-2 won’t need to go through a very grueling and lengthy approval process with Euro Commission and deal with objections by all countries bordering the Baltic Sea. With German discipline and profit motivation, expect Nord Stream-2 to be built in record time.
Therefore, while Germany is making all kinds of public anti-Russian noises, it’s quietly making serious strides to fortify and expand business with Russia. However, make no mistake! Russian gas transit to the EU is as much in the realm of politics and geopolitics, as in the realm of business. I will illustrate that below.
Nord Stream-2 capacity will rival the current Ukraine pipeline capacity. Russia already announced that the aging Ukraine pipeline will be eventually phased out due to the political instability and inflexible position of the Ukraine government. In short, Russia won’t be held hostage to the whims of Kiev. Nord Stream-2 agreement means Germany is making a decisive move to take away gas transit business from Ukraine.
This led some to speculate that Germany facilitated the 2014 coup in Kiev on purpose: to create an impossible situation for the Russian gas transit through Ukraine, thus making Russian gas transit business its own. I won’t categorically agree or disagree with this opinion, and here is why. There is some logic to it. Germany and other strong EU economies were always worried about the insecure Ukraine gas route. Taking steps to ensure one’s country’s energy security are natural and expected. Still, at least in part, Germany is not initiating but rather responding to various threats, acting to secure gas supply route and quantities for itself and its close allies in northern and central Europe. Germany, of all countries, is able to use its considerable European pull to secure a fast construction of the new pipeline – and it’s doing it.
Is Germany making big anti-Russian noises to appease and fool the US, while behind the scenes making deals with Russia? Here is what I see: I do think Germany is continuing clumsy attempts to sit on two chairs, playing both Russia and US, in the hopes of wiggling its way out of unfavorable agreements with the US, while keeping the door to Russian business semi-open with one foot. It’s some fancy acrobatics, to be sure, and it does look desperate. Germany and German allies – in other words, the strongest northern and central EU economies – see the writing on the wall and they don’t want to be caught in the upcoming Ukraine/US fallout. They are also rushing to secure Russian gas agreements while they still can.
Turkish Stream Prediction
It’ll be somewhat harder for Turkey, Greece and Italy to push the Turkish Stream construction through. Their pull isn’t as hefty as Germany’s and the pressure on them will be significant both from the US and EU.
But my confident prediction is this: unlike the botched South Stream project, which relied on the weak key transiter, Bulgaria, the Turkish Stream project will be accomplished successfully. The reason is that Turkey is much stronger than Bulgaria as a key transiter. Greece (key transiter 2) will be fine as well, as long as it remains steadfast. This will be a tall order, but Greeks are fighters and they can do it.
The Myth of the United EU and NATO: Geopolitical and Economic Rivalries Explosion
What many are missing is that Germany and Greece are acting here as direct rivals. Germany wants to keep all of Russian gas under its control, in order to then distribute it to all of the EU, thus keeping its control over Eurozone. Meantime, for Greece their participation in the Turkish Stream and association with Russia is a terrific negotiation ploy and additional leverage in their fight for independence against the EU, IMF and German dictate. To top it off, Russian partnership is a lifesaver for the fledgling Greek economy.
As such, Germany sees Greek revolt as a challenge to their EU power and hegemony. From this it’s easily understood that Germany and Brussels would try to undermine and sabotage Greece and other countries who are participating in Turkish Stream.
US will also try to sabotage it for both geopolitical reasons and for their own economic reasons. US wants to sell its shale gas to the EU. Its dream is to push Russia out as the primary gas supplier to the EU, taking Russia’s place and, therefore, binding the EU to itself not just militarily and economically, but also energy-wise.
Consequently, the fight between Greece and EU/Germany we are presently observing is much more than a fight for Greece’s debt restructuring. It’s also beyond the projected Grexit. It’s about distribution of Russian gas and future control of European energy security.
When Bulgaria’s puppet government foolishly refused to allow South Stream through its territory, loosing potential billions in future profits, Turkish Stream was born. It will go through the bottom of the Black Sea, using Russian waters, a small stretch of international waters and Turkish waters. Then, it will go through the northwestern-most part of Turkish territory, with branch-outs to supply large parts of Turkey with Russian gas. Why is it important that it only goes through the northwestern part of Turkey? This is the quietest and most prosperous part of Turkey. The east and south are restive and volatile, with Kurdish and Syria-related unrest.
But Turkey isn’t a member of the EU. Turkish Stream will get to the border with Greece at which point Greece will take over the pipeline for further distribution to other EU countries.
Russian President Vladimir Putin and Turkish President Erdogan sign the Turkish Stream deal
As we see, Greece/Turkey and Germany are now in direct competition for the exceedingly lucrative Russian gas venture. Therefore, the fight between them is also the fight for future control and profits.
Putin’s Gambit: the all-around win for Russia
We spoke on many prior occasions about how Putin works. Sometimes, it appears he doesn’t respond directly to various threats and adversarial actions by the US, Kiev junta and EU, instead, he takes his time and acts asymmetrically, when he is ready. And every time Russia acts, it’s an unexpected and pretty crushing move. This is why they call Putin the Grand Chess Master.
Nord Stream-2 partner is the No. 1 German energy giant E.On, as well as Shell (Dutch-British) and other German companies, such as OMV and Wintershall. It is understood that such companies wouldn’t commit to Nord Stream-2 without securing a serious backing of the German government. It is also a given that Nord Stream-2 will be pushed through by Germany in record time. In fact, it will be built faster than Turkish Stream.
This puts fire under Turkey. The thing is that after the Turkish Stream deal was signed by Erdogan, he imagined himself in the driver seat. He began looking for more preferences, playing on the Crimean Tartar controversy and delaying the approval for the engineering survey of the pipeline route. Immediately after the Nord Stream-2 deal was signed, the Italian engineering survey vessel, which was sitting in the Bulgarian port of Burgas waiting for Turkey’s permission to enter the Black Sea for six months, was finally allowed to start work. Erdogan also changed his tack on a number of other issues.
Recall what I once said before: Erdogan and Turkey are attempting to play their own game in the Middle East and southeastern Europe, not always successfully and not always nicely. However, on balance Turkey is still a strong and convenient ally for the Turkish Stream and various other projects, for a variety of reasons – from geopolitical, to psychological and economic. For one, Erdogan is pissed at the US, EU and NATO, and two, he wants gasification of his country, whose archaic coal-based system is in desperate need of replacement with clean modern energy.
Therefore, Nord Stream-2 and Turkish Stream are in direct competition. This is excellent, as it will finally balance the situation with Russian gas supply to the EU, which has become precariously imbalanced after Ukraine, and sometimes Belarus, began playing blackmail games. The result was that Ukraine endangered EU’s energy security and Russia’s energy livelihood. And that’s just not done.
There is an ‘opinion’ of ‘the couch potato experts’ that Russia won’t have enough gas to fill both pipelines.
However, having reserve capacity on hand is actually the point! Two pipelines will be filled with gas as needed, reserve capacity used as necessary. The constant competition between the two will not allow either party to attempt what Ukraine has done for years: blackmail Russia either economically or geopolitically, while keeping EU gas customers hostage.
The realisation of the plan of the competing pipelines will put an end to the American Dream of cutting Russian gas from Europe. Will US try to stop the construction? Undoubtedly. My prediction: because of well-chosen allies, and unlike with South Stream, they will fail.
The deadline for the complete turn off of the Ukraine gas transit system is 2019. Until then, EU and Germany will have to continue paying for Ukrainian gas in order to ensure Ukraine doesn’t turn off the vent.
Alexander Medvedev, Gasprom Deputy Chairman said: “After the current gas transit agreement with Ukraine expires, there will be no new contract, nor extension of the existing contract, under any circumstances. Due to the economic, political, investment and technological risks, there will be no more Ukraine gas transit, not even if sun and moon switch places in the sky.”
China: Deeper reason for the stampede to secure Russian gas
In addition to the Turkish Stream and Nord Stream rivalry, for the EU and Germany there is another, more important consideration.
Germany must act now, before Russian gas gets redirected to China and Asia via the Power of Siberia pipeline. Let’s recall my 2014 predictions: once it happens, it will be too late and EU will begin experiencing gas shortages. Shortages can be avoided if Europe acts now to secure multi-year gas commitments.
Therefore, Russia is building a fully balanced and diversified Eurasian gas supply system, and Chinese counterweight plays a big part in it.
Nord Stream-2 and Turkish Stream will eventually take all gas transit business away from Ukraine. It means that regardless of how the power in Ukraine changes in the following 2-3 years (and it will), Ukraine will only be able to buy gas for itself – at market prices. It won’t be able to profit from the exclusive gas transiter status.
Poor, naive Ukrainians; while they were yelling and screaming on Kiev maidan that Russia was bad, shrewd Europeans nodded politely and did what they had to do to provide for their energy security. This eventually will render Ukraine unnecessary for either US or EU, and, as I predicted, it will simply be abandoned. Too bad the cost will be so great for the people… I wonder, will Ukrainians ever learn?
This effectively means that US will lose interest in Ukraine and drop it like a hot potato. Recall my timeline for the mega-changes in Ukraine: 2016-18.
US LNG Shale Gas
But what about the US and its LNG shale gas, you ask? Judging by the St. Petersburg deals, Europeans aren’t holding their breath for it.
Let’s be clear: US shale gas is yet another bubble. This, awfully harmful to the environment bubble, will burst, just like so many before it.
Where is China?
What went completely unnoticed in the media was the presence of China at the St. Petersburg Economic Forum. Too bad, because this is actually the country everyone should have been watching in the first place. Chinese press wrote after the event that China and Russia fortified their future-oriented, long-term strategic partnership. Russia is the key partner in China’s New Silk Road project, which will unite in one economic space China, Russia/Eurasian Union, most of Asia and EU.
For more listen to my interview: Putin’s Disappearance and the New Silk Road ~ The Plane Truth
I spoke many times about the need to reunify all of Eurasia. This is one continent. The artificial division on Europe and Asia has to come to an end. Through trade and energy, this is what Russia and China are working on.
While Germany, Turkey and Greece trip all over themselves to be first to sign gas transit agreements with Russia, China is continuing its patient long-term expansion. Unlike the expansions of the US and EU, it targets to cooperatively unite, not divide. Patience is one thing Chinese have lots of. Pragmatic wisdom and vision is another.
Europeans could learn a lot from both Russians and Chinese.
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Posted on July 2, 2015, in Economy & Investment, Empire Collapse, Eurasia, Geopolitical Trends, Predictions 2014 & Long-Term, Russia, Ukraine, Videos and tagged Angela Merkel, China, collapse, EU, eurasia, European energy security, gasprom, geopolitics, Germany, Greece, Greek debt, Greek PM Tsipras, Grexit, Lada Ray predictions, NATO, New Silk Road, Nord Stream, Nord Stream-2, Power of Siberia pipeline, Putin's gambit, Russia-China partnership, Russian gas, Russian Gas Transit through Ukraine, South Stream, SPIEF 2015, St Petersburg Economic Forum, Turkish Stream, Ukraine, US LNG shale gas, Vladimir Putin. Bookmark the permalink. 9 Comments.