Prime Minister Vladimir Putin has commissioned the first stage of a submarine trunk gas pipeline in the Baltic Sea
The pipeline was commissioned in a business-like atmosphere. Vladimir Putin did not have to push a symbolic red button or watch a screen flashing vital statistics. Putin entered a tent at a gas-compressor station guarded just as closely as the state border and approached a computer showing the station's online diagram. He clicked on the gas valve and activated real mechanisms behind barbed wire. The first amounts of commercial-grade gas then started flowing inside what is now the longest operational submarine gas pipeline.
The ceremony of commissioning the Nord Stream pipeline has coincided with Kiev's resounding statements for the need to revise Ukrainian-Russian gas contracts and its promises to sue Moscow at the International Court of Arbitration, unless this happened. But Vladimir Putin remained calm and noted that Ukraine had now lost the exclusive status of a transit state.
"Ukraine is our long-time partner which had traditionally exclusive privileges of a transit state. But such privileges are now vanishing into thin air. And our relations are becoming more market-oriented," the prime minister said during the ceremony.
Gazprom CEO Alexei Miller added that "longtime" was the key word in Vladimir Putin's commentary. Indeed, Ukraine should worry about its transit capabilities because 50% of the Nord Stream project's second trunk pipeline has already been completed. Deputy Prime Minister Igor Sechin said the possible construction of the pipeline's third stage was now being discussed, but that no specific agreements had been reached.
At a separate meeting, Vladimir Putin asked Alexei Miller how much Ukraine annually saved as a result of a discount granted it by Moscow in exchange for the deployment of the Russian Black Sea Fleet in Sevastopol.
"This makes up for $4 billion, and they will receive this subsidy each year," the Gazprom CEO replied.
Consequently, the prime minister indirectly replied to Ukrainian President Viktor Yanukovych's statement that Ukraine was annually paying an extra $5-6 billion for Russian gas. Miller also doubted whether Yanukovych was briefed on authentic Russian gas prices.
"As far as prices for Ukrainian clients are concerned, the pricing principle meets the principles of operation on the gas market and compares with prices for Germany," Miller subsequently told the paper.
He added that Gazprom owned trunk pipelines in Germany, and that Ukraine's neighbours, including Poland, Hungary and Romania, received more expensive gas. Consequently, Ukrainian clients have nothing to complain about.
Gazprom does not fear the liquidation of the state-owned Naftogaz energy company or a possible Ukrainian lawsuit. Under the relevant contract, Kiev has to appoint the company's legal successor, which will honour contract terms until 2019, Miller said. He told the paper that prices could only be revised on conditions stipulated by President Dmitry Medvedev, namely, if Naftogaz were to be sold to Gazprom.
Deputy Prime Minister Igor Sechin assured the newspaper that it was virtually impossible to terminate the gas contract and that the parties will fulfill their obligations.
"We should attentively and cautiously address the contract's termination. The parties have assumed obligations, there are mechanisms for discussing specific issues, and then there is the principle of taking the case to a court of arbitration," Sechin said. "It's impossible to unilaterally terminate the contract, and it would be a direct violation by the party which makes this move," he added.
