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Ukrainian unrest jeopardizes Russian gas supply to Europe

Anonymous threats to blast hydroelectric stations and nuclear power plants are heard more often in Ukraine

MOSCOW, January 29. /ITAR-TASS World Service/. The South Stream pipeline becomes more and more needed, under the title the Nezavisimaya Gazeta publishes an article about developments in Ukraine that jeopardize transit of Russian gas to Europe. The risk to disrupt Ukrainian transit may speed up talks on the South Stream project, experts believe.

Anonymous threats to blast hydroelectric stations and nuclear power plants are heard more often in Ukraine, the country's security service reported on Tuesday. In accordance with the order of the minister of energy and coal mining industry, all the nuclear facilities are under special guard.

Risks to disrupt the gas transit are increasing. In addition to state risks already accustomed, there is terrorist threat. However, to date there is only talking. Seizure of a pipeline is a very serious step. The opposition is unlikely to dare to do it. In case of halts in gas supply to Europe, regrettably, the European community will blame Russia, believes Rustam Tankayev, a leading expert of the Union of Oil and Gas Producers of Russia.

On the other hand, whatever is said in the EU, Europe's "voting by a purse" shows that alternative projects of Gazprom, such as the South Stream pipeline, are still of priority. Thus, the situation in Ukraine makes the South Steam project more favored.

The director of the National Energy Institute, Sergei Pravosudov, also believes that the tense situation in Ukraine may accelerate the development of Gazprom's other projects. If attempts are made to seize facilities of Ukraine's gas transportation system, they will be toughly thwarted both by authorities and by the opposition, the expert hopes. However, Ukraine’s political instability automatically causes concerns among buyers of Russian gas. They will advocate the soonest construction of alternative gas pipelines and begin to put pressure on the European Commission, Pravosudov believes.

Unrest does not cancel Ukraine's commitments under the contract, notes a leading analyst at Wild Bear Capital Viktor Neustroyev. Nevertheless, if other people come into power in the country, they can specially disrupt transit gas transportation to show that Ukraine has become a more independent state. Moreover, the opposition may receive additional support of the population if it officially declares that it will settle the gas issue with Russia from the position of strength. However, in reality, loss of transit through Ukraine is not a too big problem. The North Stream capacities allow transporting the transit volume through alternative routes, though more costly. The only problem for Russia here is to prevent transit piping of Azerbaijani and Central Asian gas to Europe through Ukraine.

 

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