Ukrainian CEO of Naftogaz accuses Russia of using gas as geopolitical weapon as energy crisis worsens

• European households are facing a sharp increase in their energy bills, with nerves growing increasingly nervous as winter approaches as electricity and gas prices skyrocket.
• Speaking to CNBC via video call, Naftogaz CEO Yuriy Vitrenko said Russian energy giant Gazprom was manipulating the region’s energy crisis in an attempt to strengthen the case for starting flows through Nord Stream 2.
• “This is happening right now … Record prices that have really hurt Ukraine’s economy [and] not just Ukraine, the whole region by and large. If it’s not an economic war, what is it? “Said Vitrenko.

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Naftogaz CEO Yuriy Vitrenko.

LONDON – The chief executive of Ukrainian energy giant Naftogaz has accused Russian Gazprom of using natural gas as a geopolitical weapon, calling on the United States and Germany to take action against Moscow pending regulatory approval of a project controversial pipeline.

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It comes shortly after the International Energy Agency, the world’s energy watchdog, stepped in to call on Russia to send more gas to Europe to ease the growing supply shortage. In the region.

IEA declaration Tuesday was seen as a rare reprimand from the Kremlin and further supported the view that Moscow played a role in the energy crisis in Europe – alongside market drivers such as extremely high commodity prices and low wind generation.

European households are facing a sharp increase in their energy bills, with nerves develop before winter as the prices of electricity and gas skyrocket.

Speaking to CNBC via video call, Naftogaz CEO Yuriy Vitrenko said Russian energy giant Gazprom was manipulating the region’s energy crisis in an attempt to strengthen the case for starting flows through Nord Stream 2.

Gazprom did not respond to a request for comment from CNBC.

The pipeline is designed to deliver Russian gas directly to Germany via the Baltic Sea, bypassing Ukraine and Poland.

Reviews Argue the pipeline is not compatible with European climate objectives, reinforces the region’s dependence on Russian energy exports and will most likely strengthen the economic and political influence of Russian President Vladimir Putin on the region.

Construction of Nord Stream 2 was completed earlier this month. The German energy regulator has since said it now has four months to complete certification of the project after receiving all the documents needed for an operating license.

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An installation near the starting point of the Nord Stream 2 offshore gas pipeline.

Naftogaz’s Vitrenko said Gazprom was deliberately suspending gas supplies to Europe, blocking access to Ukraine’s gas transmission network to other Russian companies, and blocking Central Asian exports that could go to Ukraine. ‘Ukraine via Russia.

“It’s a very clear sign that they are using gas as a geopolitical weapon right now,” Vitrenko said.

Kiev’s relations with Russia collapsed in 2014 after Moscow annexed the Crimean peninsula to Ukraine and supported pro-Russian separatists in Ukraine’s eastern Donbass region. Ukraine says the seven-year conflict has killed more than 14,000 people.

Germany’s warning to Russia

Benchmark gas prices in Europe have climbed more than 250% since January, while benchmark electricity contracts in France and Germany have both doubled.

EU energy ministers held meetings in Slovenia this week to discuss the bloc’s energy policy.

Outgoing German Chancellor Angela Merkel sought to allay long-standing concerns over the Nord Stream 2 pipeline during her last visit to Kiev before stepping down.

Speaking last month alongside Ukrainian President Volodymyr Zelensky, Merkel said sanctions could be imposed on Moscow if gas was used “as a weapon”.

Analysts wondered how Germany or Europe would determine this is the case.

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German Chancellor Angela Merkel gives a joint press conference with the President of Ukraine following their talks at the Mariinsky Palace in Kiev on August 22, 2021.

When asked if Naftogaz believed Germany would take appropriate action if Russia’s Gazprom was deemed to be using gas as a geopolitical weapon, Vitrenko replied, “We are already seeing Gazprom using gas as a geopolitical weapon. So it’s not about the future. , but we tell them that Gazprom has been using gas as a geopolitical weapon for years. “

“This is happening right now … Record prices that have really hurt Ukraine’s economy [and] not just Ukraine, the whole region by and large. If it’s not an economic war, what is it?

Germany’s Ministry of Economic Affairs and Energy declined to comment when contacted by CNBC.

US Senate panel to discuss Nord Stream 2

Naftogaz chief executive said he expects President Joe Biden’s administration to immediately reconsider its decision to lift sanctions against Nord Stream 2 AG, the Swiss-registered company owned by Gazprom and working on the pipeline. Nord Stream 2.

Further time to lift the waiver would make such a decision “increasingly difficult,” Vitrenko said.

Biden’s administration concluded in May that Nord Stream 2 AG and its CEO were behaving in ways that warranted sanctions. However, Biden lifted the sanctions to allow time to reach an agreement and continue to forge ties with Germany.

The U.S. Senate Foreign Relations Committee is expected to discuss the matter in a closed-door hearing next week. It comes as pressure from some members of Congress intensifies to drop the waiver and impose sanctions.

Nord Stream 2: Putin’s pipeline with a problem

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FOLLOWING

“First you show that you are compliant and only then you are allowed to operate. This is how it works,” said Vitrenko.

“We expect the US government to reconsider its decision and remove this waiver and impose sanctions on Nord Stream 2. And then … when they see that Gazprom has stopped using gas as a geopolitical weapon, when they see that Gazprom and its subsidiary are changing something when they are now compliant with European rules, so those sanctions will be removed. This is the logical approach. “

“When someone is in breach, someone uses gas as a geopolitical weapon, you sanction that someone. And when they behave, you remove those sanctions,” Vitrenko said.