With winter season of 2012-2013 coming closer, “Gazprom” has started to show a more rigid position in relation to certain European consumers of Russian gas. Bringing into service of the Nord Stream gas pipeline provided Russia with additional dividends in negotiation processes with transit countries and consumers. And first of all, it has to do with Poland and Ukraine. “Gazprom” isn’t planning to revise contracts on gas supply with these countries.

The last forecasts of “Gazprom” on gas export to Europe were reduced from 154 to 150 billion cubic meters. The head of the company O.Miller declared that if it comes to choose between two figures, the advantage will be given to smaller volumes, but at a higher price. Therefore, there will be no discounts for gas. The conflict of “Gazprom” with the Polish oil and gas company “PGNiG” concerning contract revision and reduction of gas price testifies to this. The last Russian-Polish negotiations ended up with nothing. Representatives of the Polish company declared that they don’t see a possibility of non-judicial settlement of the conflict with “Gazprom”. In 2011 the “PGNiG” submitted a claim to the Stockholm arbitration court, demanding reduction of gas price from “Gazprom”. The latter refuses to reconsider the price formula, although it granted discounts to a number of European companies.

On July 20 the President of the European Commission José Manuel Barroso and the High Representative of the European Union for Foreign Affairs and Security Policy Catherine Ashton stated their concern about a possibility of repetition of the gas crisis of 2009. Due to a long-term dispute between Ukraine and Russia concerning the gas price, the risk of its repetition is considerably growing.

The EU has again declared its readiness for negotiations on creation of a three-party gas consortium with Ukraine and Russia. Similar statements arise each time before the beginning of the heating season, or are connected with upcoming electoral campaigns in Ukraine. However this time, in case of repetition of the scenario of 2009, the EU will hardly take the side of Ukraine. There are several reasons for this. The economic component encompasses: gas discounts received by Europeans from “Gazprom”, accumulated stocks in gas storage facilities and the successful policy on increasing LNG-component in the energy security of the EU countries. The situation for Ukraine is also worsened by a difficult internal political situation related to the reasons of boycott of the Euro-2012.

Already now it is possible to predict intensification of the international isolation of Ukraine after the October parliamentary elections. There is no use doubting that they won’t be recognized as transparent and fair by international institutes. Here we can also add inevitable accusations of unauthorized siphoning of the Russian gas by Ukraine and questions of shortage of contract volumes. That is, Ukraine will find oneself between the economic pressure of Russia and the political pressure of the EU. Therefore, during the autumn and winter period the Ukrainian society can already become a hostage to international games in terms of recognition of parliamentary elections valid, or changes of the whole system of power.

On June 21-23, 2012 the 16-th St. Petersburg International Economic Forum took place. In public participants concentrated on discussion of the Eurozone crisis consequences and scenarios of the world economy development. It was expected that the future of the Shtokman field which is strategic for Gazprom would be disclosed at the forum. We remind that, it is situated in the Russian part of the Barents Sea shelf. Deposits make up 3,9 trillion cubic meters of gas and about 56 million tons of gas condensate. A company-operator “Shtokman Development AG” was created for the realization of the project. The main shareholders are: Gazprom (51%), French “Total” (25%) and Norwegian “Statoil” (24%).

At the forum the deputy chairman of the Gazprom’s board O.Medvedev only declared that the scheme of realization of the Shtokman project will be changed. The validity of the shareholders’ agreement of partners has ended on July 1 this year. A dispute between foreign shareholders got on the way of plans realization. And it looks like exactly thanks to efforts of “Total” and “Statoil” gas production is again postponed for an indefinite term.

Back in 2007 “Gazprom” planned to begin extraction before 2013. Investments made up around 30 billion dollars. At that time it was planned to sell gas in the form of LNG to the US market. However, the present conjuncture of the world gas market and US intentions to export LNG to Europe have changed plans of Gazprom. Appeals to direct a half of future Shtokman gas to Gazprom’s gas pipelines started to be voiced more loudly.

It is clear to all shareholders that it is necessary to change the concept of the project. Binding to markets of both Europe and Asia will be defining in determination of a new business model. Besides, the countries of the Near East continue to apply pressure on the contract Russian gas by their own LNG at the European market. However, a formula with many unknown can be found here as well. The main question is where to and what sort of gas will come from the Shtokman?

Means for the project have already been spent, and the extraction, taking into account all technological features, is postponed at least till 2018. The budget of “Shtokman Development AG” was about 1,5 billion dollars, the half of which was contributed by “Gazprom”. The liquidation of the present company-operator and the creation of a new legal entity with new shareholders won’t resolve the situation. Moreover, it can cast a shade on the foreign partners of “Gazprom”. After all the amount of lost investment of “Total” and “Statoil” is not the sum that matches up with the future profits from U.S. export of LNG to Europe and Americans sure will be ready to share the obtained for getting quite specific advantage in time.

The nimiety of the situation of five years’ uncertainty with the Shtokman is a too expensive pleasure, which can also testify of the foreign partners’ interest in postponement of the project realization. The world LNG market develops dynamically and nobody is going to wait for Russia. Therefore, we should expect a rigid and clear position on the Shtokman project in the manner of the president of Russia.

An idea of LNG-terminal construction has been discussed in Ukraine for a long time already. The government and opposition constantly highlight the necessity of reduction of energy dependence upon Russia. Similar statements can be heard more loudly with electoral campaigns coming closer. However, something always got in the way when it came to realization of concrete projects. This year hasn’t become an exception also when the government has brought into focus a question of search of alternatives to Russian gas on the eve of parliamentary elections. Statements of the vice-premier of Ukraine S.Tigipko that Ukraine should support construction of the tanker fleet for liquefied gas transportation look at least very strange. Especially, if we take into consideration a catastrophic condition of the ship-building sphere.

At the end of March Ukraine’s State Agency for Investments presented technical and economic assessment of LNG-terminal construction project at the Black sea coast with 10 billion cubic meters capacity. It is planed to start its construction in July, 2013. According to optimistical forecasts of the Ukrainian officials, the first gas from the LNG-terminal should come to Ukrainian gas-transport system (GTS) in 2016, and in 2018 it will start to work at full capacity. However, there are a lot of reasons which put the realization of this project in doubt.

Firstly, the revision of Ukrainian-Russian gas contracts of 2009 is very unprobable with the current leadership of Ukraine, at least till 2015.

Secondly, the reduction of Russian gas price directly depends on the question of creation of a consortium on management of the gas-transport system of Ukraine with Russia’s participation. The credit line of Russian banks for Ukraine’s payment for that same Russian gas constantly increases. Hence, what part in this possible consortium will belong to Ukraine as a debtor of Russia, is a question which needs no answer.

Thirdly, a considerable external financing is necessary for the realization of the mentioned project. The sum fluctuates within 850 million euros. The government declares that it has contacted companies such as Exxon/Mobil, Chevron and Total with an offer to participate in project financing. However, it’s not known about the consent of any of them to participate in the project till now. Besides, the indicated companies have been admitted to participation in projects on development of considerable deposits of hydrocarbons in Russia. Hence, Russia’s influence on decision-making of these companies concerning participation in the Ukrainian project allows to assert that the situation won’t change.

It looks like the Ukrainian government starts to understand all the hopelessness of LNG-terminal construction. Especially, in case the Ukrainian GTS will belong to Russia. The current inactivity of the Ukrainian authorities only confirms development of such scenario.

Azerbaijan and Turkmenistan were voiced among sources of gas supply for the LNG-terminal, and in the long-term prospect it could be Algeria, Egypt, Nigeria and Qatar as well. However, issues of distribution of energy resources in regions of these countries are directly connected with geopolitics. Ukraine again and obviously loses to Russia in this sphere. Hence, there is no need to expect the observance of schedules voiced by the government concerning the construction. And there is no point in doubting the fact that Kremlin which is interested in impracticability of this project will take a rigid international position.

Another summit Russia-EU has demonstrated Russia’s interest in communication with the European countries exclusively in the bilateral format without EU officials. V.Putin has let EU representatives know that he, as a president, is ready to communicate with heads of the European states in the first place. V.Putin’s first visits to Germany and France have set the main priorities.

Russia has demonstrated desire to improve its relations in the European direction. And representatives of the EU institutions have been invited to communicate at the level of colleagues from the Eurasian economic commission. That is, negotiations should be conducted at the level of supranational regulatory bodies. The formalized presentation of Common Economic Space which already is a part of the future Eurasian Union has actually taken place.

On the whole, the summit has confirmed Russia’s multi-vector approach course. However, the economic crisis in the euro zone starts to more and more tangibly prevent the EU from building partner relations with Russia. The latter also has its own problems. The difference is that V.Putin as the head of the state can take responsibility. And the European Union can distribute it among many parties. That is, among nobody.

Gas became the main topic of the recent session of heads of the governments of the CIS countries. Turkmenistan, as the country presiding in the Commonwealth, paid special attention to gas transportation. Today Turkmenistan, occupying the 4-th place in the world according to the discovered gas reserves, tries to diversify routes of export of its own gas and increase the quantity of its consumers. Now, the basic buyers of Turkmen gas are Russia, Iran and China. Recently, an agreement on gas supply to India and Pakistan was signed. The project of TAP pipeline with projected volumes of 30 billion cubic meters (Turkmenistan, Afghanistan, Pakistan and India) is actively supported by the US. However, sanctions against Iran make gas pipeline construction between this country and Pakistan impossible. Discussion of construction of the pipeline in direction of Europe has recently become more active. Ukraine is trying to join this process.

Prime-minister of Ukraine M.Azarov has declared interest in renewal of supply of the Turkmen gas. However, Russia again is the basic barrier here – we need the consent of its leadership. Hopes are put upon the meeting of Presidents of Ukraine and Russia in the framework of July session of the Interstate Ukrainian-Russian commission. However, there is no visit to Ukraine in the nearest plans of the President of Russia.

The question of what Ukraine can suggest in exchange for revision of gas contracts of 2009 is losing its topicality every year. According to M.Azarov, Ukraine pays the highest price for Russian gas in Europe. Now, it makes up 450 dollars per thousand cubic meters on the border with Russia. And the Ukrainian gas-transport system will be necessary for both Russia and Europe still for a long time.

However, what’s most important is that its cost decreases every year. The same way as diminish transit volumes of gas which are pumped through it to Europe. After several European countries received a 10% discount from the RF, the interest of the EU to participation in gas-transport consortium creation has fallen. It would be nice to believe that this is a coincidence, and not the position in exchange for Gazprom’s discounts. Unfortunately, the public initiative of Europe concerning the change of price for Ukraine has taken backseat.

The energy policy of Russia concerning Ukraine can be assessed in different ways. Yes, from the position of Kremlin it is rigid; whereas, Ukraine constantly waits and hopes. Gas in Russia won’t end up soon, and Ukraine will need it for a long time. The only thing which is possible to ascertain is that analysts and economists of “Gazprom” show their foresight and professionalism; whereas in Ukraine, all forecasting assessments come down to the statement of facts – growth of energy dependence upon the Russian monopoly.

Reduction of gas dependence upon Russia, as the Ukrainian authorities understand it, is only a declaration of intentions. Another leadership of Ukraine once again shows absence of ability and desire to take the responsibility.

Upon the initiative of the President of the RF V.Putin and signature of the Prime-minister D.Medvedev, one of the greatest energy companies “Rosneft” has received a new head – I.Sechin, the former vice-premier, curator of the fuel and energy complex of the RF.

A new vice-premier A.Dvorkovich who will take care of the energy sector and a head of the Ministry of Energy O.Novak are representatives of a young generation of Russian managers. They are professionals of exactly financial and economic sphere. It is known that A.Dvorkovich supports the fastest possible privatization of the greatest energy companies. The opponent of this idea I.Sechin has proved to be a supporter of preservation of the state control over the main oil and gas companies.

Although I.Sechin hasn’t been included into the new government, his influence upon the fuel and energy complex will continue to be very serious. Russian mass-media have been debating about I.Sechin’s discussion with D.Medvedev for a long time already. However, the new head of “Rosneft” has been working with V.Putin since 1991 and will continue to have the possibility of discuss questions directly with the President. At the same time all initiatives that will be provided by the head of “Rosneft” will most probably find the support by the Russian President.

Earlier I.Sechin supported the idea of consolidation of energy companies on the basis of “Rosneftegaz”. Henceforth, the chances of appearance of a new oil giant in Russia are considerably growing. I.Sechin can come back to the idea of consolidation of budget-forming assets, however, already on the basis of “Rosneft”.

On the whole, a new structure of the Russian government demonstrates appearance of young supporters of market reforms out of D.Medvedev’s environment at the power Olympus. A part of Putin’s team of professionals-practitioners has gone to the Presidential Administration or, as I.Sechin, will continue to do what they are best at. That is, to fill the budget.

Apparently, it’s the first time in the history of independent RF that the two equivalent centers of decision-making are arising. The first one is the government headed by D.Medvedev. The second one is the informal government of advisers in the Presidential Administration. I guess Russians hope that they both will have a constructive dialogue.

The position of official representatives of Europe concerning the imprisonment of Ukrainian oppositionists has forced the leadership of Ukraine to postpone the Summit of  Central European States. The session of Ukraine-EU Cooperation Council  will pass amid sharp statements of European ministers concerning impossibility of signing and ratification of the Association Agreement. On the whole the strengthening of criticism on the side of European leaders concerning actions of the Ukrainian authorities becomes a tendency. Massive ignoring of the Euro-2012 by the European political establishment becomes the following stage. Sport becomes a player of big politics.

Meanwhile, the Ukrainian authorities obstinately ignore the official EU position. They are occupied with providing their own inviolability in Ukraine. With the Euro-2012 coming closer, the trust to actions of authorities is incessantly falling. Numerous inquiries of journalists about bribery during the preparation for this event, an imperfect infrastructure, cosmic prices for hotels and a spoiled international image — have become an integral part of the Euro-2012. The authorities, on the contrary, are happy due to the development of the multi-billion budget, and therefore sure that the football championship will pass at a “high” European level.    

The authorities have proved that they know how to shift all responsibility to their own people. Therefore, unfortunately possible losses from the political isolation of Ukraine will be felt, first of all, by ordinary citizens. Investments put up into the Euro-2012 have every chance to become not the improvement of well-being, but to turn into the growth of tax pressure upon Ukrainians.  

If all forecasts concerning the ignoring of Ukraine’s leadership during the football championship get realized by Europe, then the following logical stage of political isolation will become the non-recognition of results of the parliamentary elections in Ukraine. 

Obviously, preparatory actions of the Ukrainian authorities concerning the continuation of their powers will turn for them into the acknowledgement of their own illegitimacy. And the first among these measures are legislative initiatives of the authorities concerning complication of a procedure of organization and conduction of peaceful actions, the right to shutdown Ukrainian Internet sites without court decisions and, consequentially, transition of their activity to offshores due to actions of law-enforcement bodies. Protest moods of citizens and general discontent by actions of authorities will only grow in Ukraine.

Governmental circles of Russia discuss now the draft bill “About development of Siberia and the Far East”. At the beginning of the year a political decision was made that a special structure should work on the development of Siberia and the Far East. The main priority is the construction of infrastructural objects at the specified territories. The idea was supported by V.Putin. At the beginning of February the future president declared that means of the Reserve Fund and Fund of the National Wellbeing can be used for the financing of state corporations on Siberia and the Far East. According to the Ministry of Finance of the Russian Federation, as of March 1, 2012, a total volume of the Reserve Fund makes up 62,4 billion dollars., and that of the Fund of the National Wellbeing – 89,84 billion dollars. The volume of means is amazing.

Already at the end of March Russian mass-media disseminated information that an independent noncommercial organization can be engaged in the development of Siberia and the Far East. However, actually it means the creation of the state corporation which will be directly submitted to the president of Russia, and the list of investment objects will be confirmed by the government.

On a whole the specified initiative provides for the introduction of a number of positive innovations by the government. Among the main ones are the exemption from taxes on profits, on mineral extraction, granting of privileges to concrete projects within the limits of activities of the corporation, and what’s most important, inhabitants of Siberia and the Far East will be provided with privileges on accommodation and studies. In the framework of the whole project it is planned to create 5 million workplaces. By the way, among the primary steps of development of Russia, voiced by Putin during the report on work of the government in the State Duma, is the creation of 25 million qualitative workplaces in economy in the nearest years. Moreover, variants of simplification of procedures of receiving citizenship by foreigners who will settle in the specified territories are discussed.

Along with positive moments, there are negative ones as always. There exist not unreasonable fears that the creation of the state corporation on the contrary will slow down the development of the specified territories. After all, any private investor who has a desire to work there will have the state corporation with special preferences as a competitor. Hence, nobody is talking about competition here. An accurately limited system of governmental admission to participation in the development of Siberia and the Far East will operate.

Realization of the specified project is also connected with geopolitical questions. The basic problems lie in the plane of cooperation of Russia with the countries of Asian-Pacific region. Especially this has to do with China. In one of his program articles, V.Putin already urged to more actively build communication with China on the basis of cooperation of technological and industrial potentials of both countries. Meanwhile, this cooperation is demonstrated by the saturation of the Russian market with poor-quality goods and cheap work force. Nobody hurries to share technologies. Also the realization of plans of the Russian leadership is connected with the creation and effectiveness of new international associations, such as the Eurasian economic union for example. In the realization of the development of considerable territories of Siberia and the Far East Russia can face the main problem – shortage of human resources. Unfortunately, the demographic crisis in Russia only deepens this problem. The way-out can be found in the historical experience of attraction of human potential of the countries of the former Soviet Union to the development of Siberia and the Far East. However today, these countries have their own social and economic and demographic problems. Hence, China can have all the advantages.

Strategically, the decision on the development of the infrastructure of Siberia and the Far East fits into the foreign policy concept of development of Russia, voiced by V.Putin. However, in case of the creation of the state corporation, it will be necessary to prove the efficiency of realization of the project of development of the specified territories. The experience of Russian state companies is an example here. Everything can end up right after budgets disbursement. In 2011 there was already created a financial structure – the Far East Development Fund. Despite the pumping of the Fund with means, there is no project realized by it today, although the creation of many workplaces was planned. However, the advantage in favor of the state corporation is the Russian reality now. It is paradoxical, but rigid state control at the highest level gives a chance to control corrupt practices at the level of top-management and regional power. At the same time, it will increase competition between foreign service and financial companies for participation in this mega-project.

Considering the importance and scale of the new mega-project, the creation of a new structure of development of Siberia and the Far East has every chance to be realized right after V.Putin’s inauguration. Anyways, the choice of the head of this project will show seriousness of intentions concerning the development and exploration of the major resource region of Russia.

Information concerning possible signing of the gas agreement between Naftogaz of Ukraine and German RWE recently appeared in Ukrainian mass-media.  What’s meant is the delivery of spot gas bought in Europe to Ukraine through pipelines of Slovakia.

Even in case the short-term contract between Naftogaz and RWE is signed, it won’t reduce dependence of Ukraine upon Gazprom.  Annual volumes declared by the new contract can make up about 1 billion cubic meters.  Whereas Ukraine consumes about 70 billion cubic meters of gas per year, out of which at least 40 billion cubic meters under the current contract.

Germany buys about 30 billion cubic meters of Russian gas annually.  In winter  theses volumes grow.  At the beginning of March RWE declared its intentions to reconsider conditions of its own long-term contracts with gas suppliers already in 2013. Priorities will be given to negotiations with the greatest gas suppliers.  Gazprom has a leading place among them.  36 % of purchases of RWE go to Russian gas according to long-term contracts.

Also mass-media have been actively discussing information concerning Ukraine having conducted talks with Turkey and Bulgaria about the delivery of liquefied natural gas from Turkish storage facilities through the Bulgarian gas transportation system.  It is possible already now to ascertain considerable problems of a possible future cooperation. Since both countries are involved in the realization of  “the South stream” project.  And hardly anyone will spoil relations with Russia by means of gas contracts with Ukraine.

Besides, such scheme of gas delivery to Ukraine foresees the attraction of Romania as well. It is impossible to directly deliver gas to Ukraine by means of Bulgarian gas-transport system. Hence, Ukraine can face the aggravation of relations with Romania which already aren’t simple.  As for today the issue of borders with this country continues to be open, especially for the latter.

During the winter period European countries constantly fall short of volumes of gas, especially of the Russian one.  This winter Gazprom was simply compelled to limit gas deliveries to Europe, concentrating fuel resources on covering Russian consumers’ demand.  No additional volumes of gas were within reach.  And nobody in Russia was going to sacrifice the heating of its own population on the eve of presidential elections.

Unlike previous years, Europe starts to cautiously treat the constant accusations addressed to Ukraine of taking gas meant for Europeans.  The fact that Ukraine managed to fill up the lack of gas for Europeans with the help of its own forces out of its own storage facilities is established, as well as the fact that Gazprom lacks financing for the development of new deposits and building of gas pipelines.

In this sense the statements of the Russian leadership concerning the acceleration of building of “the South stream” sound too optimistic.  The situation around the reduction of volumes of Russian gas supply to Europe is a bright confirmation here.

Firstly, this has placed the very participation of European companies in the project of “South stream” construction in doubt.

Secondly, a traditional charge of Ukraine’s unauthorized gas takeoff already didn’t surprised anybody.  The only thing that it testified was a lack of imagination in terms of creation of information provocations.

Gazprom has been constantly denying the reduction of deliveries to Europe.  However, accusations were voiced by the European countries, and by no means by Ukraine. Austria, Slovakia and Poland, which suffered from frosts most of all, declared that deliveries were reduced.  Germany, Hungary, Bulgaria, Romania, Greece and Italy also demanded that deliveries were increased.

Already in the middle of February Gazprom reduced the gas price for the European consumers by 10 % on average.  Whereas Ukraine is unsuccessfully trying to get a discount for the Russian gas.  Previous negotiations were unsuccessful.  Signing of an additional agreement to the current gas contracts again remains only possible.

As for today preparation for parliamentary elections becomes more topical in Ukraine.  The Ukrainian leadership won’t afford itself such luxury as the surrender of the Ukrainian gas-transport system to Russia on the eve of conduction of elections.  Gazprom is interested in the creation of a bilateral consortium on possession of the Ukrainian gas-transport system. And this is the condition for a discount of the gas price. Ukraine insists on the participation of Europe. Hence,  there is no sense to expect the revision of gas contracts of 2009.

Moreover, the price of oil is high and will grow in the nearest future which will accordingly influence the formation of the gas price.  And these are the additional means for the Russia’s budget.  The situation is deteriorated for Ukraine also by the fact that Gazprom goes through financial difficulties it terms of development of new gas deposits and construction of new gas pipelines. Therefore, Russia’s absence of desire to reconsider contracts unprofitable for Ukraine is completely clear. Gazprom has occupied an advantageous position of an observer and recipient of additional profits. Whereas everything what has been left to Ukraine is to disseminate the information about an active search of alternative energy-carriers deliveries in mass-media.

Results of the national will expression on March 4 are a predicted victory of the needs of Russians in the stability of the state. V.Putin has turned out to be capable of becoming the spokesman of representation of an average Russian citizen in far-off regions. The reality of the present times is that the Russian civil society has started to get formed. However, the future of Russia is not in the satisfaction of interests of the capital and stability of the “middle” class. Protests of the bourgeoises have been opposed to the will of the majority.

Absence of a singular leader of opposition is not a victory of the new-old president. It is a paradox of conservatism. They like a strong leader.

The policy of “Russia of the future” will be certainly formed in the Center. However, the role of regions will grow. This is an objective reality of the present times and a pledge of a full term of V.Putin’s presidency.

Budget-forming branches work thanks to average citizens. Their expectations and choice of unifying statist guarantees of V.Putin were realized in their choice.

Unfortunately, opposition has appeared to be ready only to state claims concerning the formation of strategy of development of Russia, and it has really turned out to be incapable of offering alternative to the majority of Russians.