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Thread: Energy Transit routes and conflict

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    Senior Contributor Toby's Avatar
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    Energy Transit routes and conflict

    Two proposed pipelines. One backed by Russia and one backed by the US. President Assad of Syria refused permission for the US backed pipeline it is thought under pressure from Russia. Who have backed another pipeline from Iran. Clearly Syria is required for both proposed pipelines. The city of Aleppo being a crucial part of the US backed pipeline route. In 2012 Assad authorized the Iranian pipeline, which is coincidently the same year the present war started.

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    Russian backed pipeline from Iran

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    US backed pipeline from Qatar

    Clearly other countries in the region are also players in the current Syrian war with huge amounts of money at stake for both sides.

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    Senior Contributor Versus's Avatar
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    Yea, that is the real reason why things happened the way they did since 1990. With all of their ugly baggage.

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    Senior Contributor Toby's Avatar
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    Originally negotiated by the Unocal Corporation with the Taliban back in 90's and then called off after the 9/11 attacks. The T.A.P.I Gas Pipeline has eventually started construction and will link the Turkmenistan Gas field with Fazilka in India. The pipeline will travel straight through Helmand and Kandahar Provinces

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    Quote Originally Posted by Versus View Post
    Yea, that is the real reason why things happened the way they did since 1990. With all of their ugly baggage.
    1990? Movement of any valuable commodity has the potential for conflict.

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    Senior Contributor Toby's Avatar
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    EU silent as Russia gears up for third gas war against Ukraine


    Article by: Mykhailo Honchar, Serhiy Zhuk, Andriy Chubak

    January 2006 and 2009 made headlines thanks to two gas wars between Russia and Ukraine. Now we know that they were part of Russia’s use of non-military instruments in new generation wars, which went basically unnoticed by the outside world.

    Both gas wars were started and controlled by the Kremlin with the purpose of increasing Ukraine’s energy dependence on Russia, thereby increasing its economic and political dependence as well. It also demonstrated to Europe the need to undertake its own projects because Ukraine was being made to look like an unreliable transit link.

    Now, in 2017, the Kremlin is close to launching a third gas conflict.

    The first signs of a new conflict
    In 2014, Russia attacked Ukraine’s energy sector through a gas blockade and by creating shortages of anthracite coal and power. In mid-June 2014, as the “Novorossiya” project went into full swing and Russian-backed separatists were waging a full-fledged war against the ramshackle Ukrainian army and volunteer battalions, Russia launched a gas blockade against Ukraine. Gazprom completely stopped supplying the country with natural gas and when it resumed in December, under pressure from the European Commission, it still kept gas deliveries to the EU to an absolute minimum in the first quarter of 2015 in order to avoid the reverse supply of gas to Ukraine.

    Ukraine’s main pipeline, Uhrengoi-Pomary-Uzhhorod, also suffered from several attempts at sabotage. The idea was that all of this would first force Kyiv to capitulate on energy, and eventually lead to a military and political capitulation.

    Ukraine’s radical reduction in domestic gas consumption and the success of reverse deliveries as world prices for hydrocarbons went into a tailspin, coupled with imports of anthracite from non-Russian sources, and growing deliveries of nuclear fuel from alternate suppliers, all cut into Russia’s ability to use the energy component in its hybrid war against Ukraine.

    Then, the Unified Energy System (UES) of Ukraine came under attack.

    The first large-scale attempt by hackers to cause a blackout at the UES took place on 23 December 2015. A year later, on 17 December 2016, a second attempt was made. Fortunately, both attacks were unsuccessful, although they did cause damage.
    Even after Ukraine managed to bring its imports of Russian gas down to zero, Russia keeps trying to use energy in its hybrid war.

    The Gazprom’s new scenario
    At the end of summer 2016, it was clear that Russia was preparing an artificial provocation to start a third gas war.


    We see this in pulsations of the operating pressure of gas coming into Ukraine’s trunk lines that move gas from Russia to the EU. Obviously, the Russians are counting on Ukrtransgaz to distribute the gas to European consumers with the same pulsations.

    Needless to say, this would not please EU companies and, as a consequence, Gazprom’s insistence that Nord Stream 2 pipeline was necessary because of “depreciation and proneness to accidents at the Ukrainian Gas Transportation System” would appear to be justified and would achieve its objective.

    One other explanation for the pulsations is that Gazprom is practicing for “winter military action.”
    By maximizing deliveries to the EU primarily by transiting through Ukraine in October-December of 2016, Gazprom can easily minimize it at some point in January-March 2017, the way it did in 2015.

    The objective here is that should Ukrtransgaz take additional fuel gas from the transit stream to provide the necessary technical conditions to compensate for the pulsating working pressure of the pipelines, Gazprom will accuse Ukraine of “stealing transit gas” designated for consumers in the EU.

    Thus, the groundwork is laid for the next propaganda campaign: Ukraine steals gas because it did not reserve enough in its underground gas storage (UGS) and refused to buy additional volume from Gazprom, so Russia cannot continue to transit gas through Ukraine because Ukraine siphons off gas from the transit stream. And Gazprom stops all transit through Ukraine.

    This is how a third gas war might be provoked, with all the weight of Russia’s propaganda presenting Ukraine as the guilty party while Gazprom becomes Europe’s savior. And thus, the European Commission will have to quickly agree to Nord Stream 2 as, whether the EU wants it or not, the new pipeline will have to be built because Ukraine is “no use” as a transit link.
    Ukraine’s underground gas storage supplies: propaganda and reality
    Propaganda-style media claims prepared in the Russian Federation to provoke a gas crisis have been forthcoming both at the corporate level and at the diplomatic and political levels.

    First, claims about the low levels in Ukraine’s underground gas storage system and Ukraine’s supposed subsequent unsanctioned siphoning of Russian gas had been expressed by specialized officials. But starting from 14 December 2016, Russian President Vladimir Putin joined the propaganda campaign. “Putin expressed concern that the Ukrainian side is not upholding the agreement regarding the purchase of gas in this winter season. It was pointed out that this creates the risk to the transit of gas to Europe,” said a Kremlin press release after a telephone conversation with German Chancellor Angela Merkel.

    And on December 19, Gazprom boss Alexei Miller himself stated openly: “Gazprom sees clear risks for transit gas going through Ukraine to Europe and should there be illegal siphoning of gas by Ukraine, we may have to disrupt gas deliveries to Europe.”

    These examples of Russia’s large-scale political and propaganda activity demonstrate its

    preparations for a third gas war as soon as the European Commission makes its final decision about the OPAL pipeline.
    Do these claims correspond to reality?

    This season, Ukraine’s UGS was filled based on estimates of internal gas consumption in Ukraine, transit volumes, and capacity for gas imports. This means that even in the case of abnormally low temperatures, Ukraine can live through the heating season, albeit with minimal comfort.

    The media storm over Ukraine’s supposed shortage of reserves in the UGS has been based on three main points:

    This year the heating season began somewhat earlier than in 2015-16 and could be more intense, given that the weather forecast is for a colder winter. In 2016, Ukraine stopped pumping gas into its UGS by October 16, and total reserves stand at 14.7bn cu m.
    In previous years, the volume of gas stored in the UGS was higher than in 2016: in 2015, gas stopped being pumped in only on October 31 and reserves stood at 17.05bn cu m, while in 2014, it stopped being pumped in on October 21 and aggregate reserves stood at 16.73bn cu m.
    NJSC Naftogaz of Ukraine pumped only 6.4bn cu m in 2016, which appears to be an unprecedentedly low volume in absolute terms.
    All of this is true but overlooks the fact that Ukraine has unprecedentedly low levels of consumption and transit volumes, at only 55% of capacity. The other factor being ignored is that 3.3bn cu m of unused gas remained in the system after the 2015-16 heating season ended.


    The reduction in domestic consumption has been primarily due, of course, to a major decline in industrial production because of Russia’s war against Ukraine. With the Russian occupation of certain regions in Donetsk and Luhansk oblasts (ORDLO), a slew of major industrial gas customers stopped operations, such as the Stirol Concern, a chemical processing company based in Horlivka.

    Despite the occupation of ORDLO and the difficult economic situation in the country, gas extraction was maintained without too much of a drop in output.

    Over the last few years, Ukraine was also able to significantly diversify its sources of natural gas, which sharply reduced the risks of political and economic blackmail on the part of its one-time monopolist supplier, Russia.

    Today, Ukraine can get its gas from half a dozen traders through three countries: Slovakia, Poland, and Hungary. As the consumption of gas has gone down, Ukraine’s reverse deliveries from the EU can pretty well cover all of its needs for imported gas.
    Having achieved gas stability, Ukraine is still vulnerable to machinations of one kind or another on the part of Gazprom to disrupt gas supplies to the EU during the course of this winter.

    Despite all this, only the Ukrainian side answered the Russian accusations.
    The European Commission has not responded to the Russian accusations so far, which suits Russia well. Most likely, should another “gas crisis” start, Russia will make use of its distant early warning system with the European Commission, hastily put together in November 2009 and meant to manipulate consumers on the part of the supplier while completely ignoring the transit country.

    Winter risks and the EU’s position
    The main risk factor is the possibility of Gazprom increasing gas transit through Nord Stream-OPAL, bypassing the Ukrainian transit network. The European Commission already gave its permission on 28 October 2016, but soon this decision was reversed.

    If Gazprom does increase its transit through Nord Stream, Ukraine’s GTS [gas transport system] could end up functioning in an unstable manner for technical reasons.

    A similar situation was observed in summer 2015, when Gazprom didn’t provide the necessary incoming pressure, and Ukrtransgaz was forced to cover the low pressure from the Russian tubes with its own gas.

    If this scenario will start to be implemented, the Ukrainians should reject their liability for the situation and hold the Commission responsible.
    Moreover, Naftogaz is not a third party to bilateral contracts between Gazprom and its European customers.

    In making its decision to increase Gazprom’s use of OPAL, the European Commission essentially provided Gazprom with a legal basis for manipulating the directions and volumes of its deliveries of gas to Europe, which could lead to greater turbulence on the EU gas market.

    But is the EU able to operatively react to Gazprom’s provocations?

    As we saw in 2009, the European Commission is incapable of quickly identifying the guilty party in hostile actions.

    This inability or reluctance on the part of official Brussels to issue a verdict as to what happened in January 2009—did Ukraine disrupt transit deliveries or did Russia disrupt incoming supplies?—encourages the Russians to repeat these kinds of “gas crises.”

    And this kind of crisis is the very thing to force the Commission into agreeing to Nord Stream 2, because, so Gazprom insists, “Ukraine is an unreliable transit link.”

    In addition, the Commission’s decision and the way the Germans have ignored the European Court’s December 23 decision about shutting down the project are disrupting reforms to the oil and gas sector in Ukraine, especially the unbundling of Naftogaz of Ukraine.

    The October 28 decision has obviously reduced transit through Ukraine’s GTS. In this context, if the European Commission decides to also wash its hands of the Nord Stream 2 issue, then it will be not so much Gazprom as the Europeans who will have left Ukraine’s system without transit gas.

    In other words, the Ukrainian GTS, which is run by a separate company within Naftogaz of Ukraine, will inevitably become unprofitable.
    Under these circumstances, the Ukrainians need to consider the option of suspending—not ending!—the kind of unbundling that will predictably lead to further losses for Ukraine. They must immediately consult with the European Commission.

    In short, if the Commission agrees to compensate Ukraine for the losses due to its decision to allow Gazprom to maximize its throughput via OPAL pipeline, then it will be possible to talk about further steps to reorganize Naftogaz.

    Conclusions and recommendations
    Given all the conditions and circumstances outlined here, it is possible to draw a number of conclusions.

    Ukraine’s GTS and UGS were and remain a key element in ensuring the uninterrupted delivery of natural gas to Europe. Despite the many years of systematic accusations by the Russian Federation that gas has been stolen or disappeared on Ukrainian territory, there has been no legal confirmation of such incidents, notwithstanding countless attempts by Gazprom to present these accusations as proven facts.

    Every heating season in the last decade has been used as a means to discredit Ukraine through deliberate propaganda campaigns that underpin Gazprom’s provocative technical manipulations and Russian media speculation in the European Union.

    This kind of propaganda has been one of the factors that fostered the building of Nord Stream 1 pipeline and continues to be used to promote its second branch and undermine Ukraine’s efforts to reform its national gas market.

    The most obvious proof of Ukraine’s reliability as a transit link to the EU is that it has maintained uninterrupted delivery of gas despite an armed conflict with Russia and the unprecedented economic and political crises of 2014.

    Ukraine can easily continue successful reforms and remain an important partner in the gas sector. However, this requires further financial and political support from the EU.
    And here the European Commission has done the opposite by granting Russia greater access to the OPAL pipeline—a move that has been properly assessed as a violation of bilateral commitments in the Association Agreement between Ukraine and the EU, specifically Article 274.

    Meanwhile, Russia continues to make use of all possible political, economic and informational instruments to cause Ukraine harm, specifically by: violating the technical conditions for the GTS to operate properly by reducing volumes and pressure on incoming gas; harming Ukraine economically by cutting into its income from transit; and damaging political dialog with the EU by continuing to foster negative actions or inaction in Brussels.

    Given the loss of support in the EU in the confrontation of Russia’s bypass pipeline networks and the threat of serious reductions or even termination of transit through Ukraine’s territory, the country needs to:

    expand domestic extraction of natural gas to bring down the need for imported gas altogether to zero;
    promote as much as possible the building of a Ukraine-Poland gas interconnector to provide diversified options for importing gas;
    make financing and implementing energy-efficiency and energy-saving measures a top priority.
    Ukraine also needs to improve and devote specific attention to cybersecurity on critical energy infrastructure: the UES, GTS and PTS and all the technical communication links.

    Finally, Ukraine needs to become more active in foreign relations and the provision of information in order to reduce the risks of the GTS becoming unbalanced as gas transit volumes go down, and to ensure its further stable operation. This means:

    consolidating efforts with interested partners to maintain and use the transit lines available on Ukrainian territory;
    instituting the post of Government Ombudsman for Energy Security with the necessary authority to coordinate the efforts of various ministries and agencies;
    oppose, in concert with other stakeholders, the implementation of Nord Stream 2 and Turkish Stream;
    increase efforts to set up an Eastern European gas hub based on specific underground gas storage system in Ukraine;
    mobilize international pressure on Russia to ensure free access to the Russian GTS by independent gas extracting companies and transit gas from Central Asia to Europe.

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    Contributor anil's Avatar
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    Quote Originally Posted by Toby View Post
    Originally negotiated by the Unocal Corporation with the Taliban back in 90's and then called off after the 9/11 attacks. The T.A.P.I Gas Pipeline has eventually started construction and will link the Turkmenistan Gas field with Fazilka in India. The pipeline will travel straight through Helmand and Kandahar Provinces

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    Expanding on this project... how viable is a gas pipeline that passes through any of the regions occupied with civil war?

    http://www.presstv.ir/Detail/2016/03...ubsea-gas-line


    These are on paper mostly

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    Quote Originally Posted by anil View Post
    Expanding on this project... how viable is a gas pipeline that passes through any of the regions occupied with civil war?

    http://www.presstv.ir/Detail/2016/03...ubsea-gas-line


    These are on paper mostly
    Conflict is negotiation by other means..In other words when the minor players are wiped out and only the few remain, the spoils are divided thus.

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    Senior Contributor Versus's Avatar
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    Quote Originally Posted by Toby View Post
    1990? Movement of any valuable commodity has the potential for conflict.
    Yes, the first iteration was NABUCCO pipeline and elimination of any form of Southern stream type of project from Russia. That is why there is a link between Germany and Turkey supporting Croats, Bosnian Muslims and Albanians against Serbs during the 90es aside from usual UK/US geopolitical interests. We were seen as Russian protege in the Balkans and thus subjected for termination.

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    Quote Originally Posted by Versus View Post
    Yes, the first iteration was NABUCCO pipeline and elimination of any form of Southern stream type of project from Russia. That is why there is a link between Germany and Turkey supporting Croats, Bosnian Muslims and Albanians against Serbs during the 90es aside from usual UK/US geopolitical interests. We were seen as Russian protege in the Balkans and thus subjected for termination.
    hmmm, not quite how it was reported here..they more or less accused you of genocide against muslims.

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    Senior Contributor Versus's Avatar
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    Quote Originally Posted by Toby View Post
    hmmm, not quite how it was reported here..they more or less accused you of genocide against muslims.
    Yes, so that they could have the reason for action. Produce the crisis and than manage it so that fits the interests. Fail proof strategy without any chance of revealing the truth and true motifs. It was a game, rigged of course from the very start and we fell for it. We simply didn't wanted for our country to be turned into Rotherham or Malme, with festering sharia law. We have been trough that before.
    Last edited by Versus; 01 Mar 17, at 18:19.

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    Senior Contributor Versus's Avatar
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    Its not just energy resources, the dream of connecting Europe with the riches of the Middle East was dream that started in the middle of 19th century and continued till this day. The first iteration that I know of and it will be extensively covered in the autopsy thread is the railroad project dated around 1852 (No 38, F.O 195/383). Second one is the infamous Orient Express. But I don't want to derail the thread so I will stop. But I know what you are talking about, as my father was working at the geological survey institute and I saw how certain "things" are done.
    Last edited by Versus; 01 Mar 17, at 18:20.

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    Quote Originally Posted by Versus View Post
    Its not just energy resources, the dream of connecting Europe with the riches of the Middle East was dream that started in the middle of 19th century and continued till this day. The first iteration that I know of and it will be extensively covered in the autopsy thread is the railroad project dated around 1852 (No 38, F.O 195/383). Second one is the infamous Orient Express. But I don't want to derail the thread so I will stop. But I know what you are talking about, as my father was working at the geological survey institute and I saw how certain "things" are done.
    I sat and I thought about your post for some time....nothing new under the sun I guess you are saying...I don't pretend that energy supplies are the only factor deciding government policy....but they are a major concern for any Industrialised country, primary I would say!

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    Ukrainian Gas fields

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    Maintaining dominance of a resource is achieved by also denying the competition, Ukrainian Gas deposits in the East and Crimea are clearly visible on the map. Make your own mind up!

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    Senior Contributor Versus's Avatar
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    Quote Originally Posted by Toby View Post
    I sat and I thought about your post for some time....nothing new under the sun I guess you are saying...I don't pretend that energy supplies are the only factor deciding government policy....but they are a major concern for any Industrialised country, primary I would say!
    Yea, but bare in mind that they almost always correlate with the major conflict between Russia and the West. The idea about railroad project here happened in 1852 and in 1853 you had Crimean war. The Nabbuco pipeline started with the collapse of Russia. So I have no doubts that war in Syria which will almost exclusively be transferred to the Balkans is any different from similar events in the past. I know that the energy issues are pivotal for the western countries, unfortunately for us they are existential at the biological level. We are not facing the diminishing standards of living but biological extinction. That is why I think that investing in new technologies and adapting to new ways of life is beneficial on multitude of levels.

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    Might want to look at Caspian gas supply increases to Europe during the late 1990s upto 2008 in relation to the Muscovite Georgian war or why the Nagorno Karabakh/Artsak dispute remains 'frozen' when Armenia would be a better and easier route. Also look into the ongoing Belarusian Muscovite gas price dispute, North Stream (1 and the proposed 2), Polish and Lithuanian LNG terminals, recent Ukrainian - Romanian agreements, the 2013 Muscovite Ukrainian 'trade war' and the gas contracts following. Gas blackmail is a form of Muscovite hybrid war as is conventional war for control of the pipelines.

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