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POLAND: Gazprom Foments Political Crisis

Bottom Line: The Polish government claims that EuroPolGaz negotiated a controversial MOU with Russian Gazprom in early April without its knowledge, and now it’s all about damage control over a Russian-Polish pipeline that would bypass Ukraine.

Analysis: This is another Gazprom attempt to lash out at Ukraine, which is pursuing energy independence, and the plan is to use Warsaw to punish Kiev. It’s also meant to be a slap in the face to the European Union, which would find itself with another Russian pipeline on its territory in contravention of its energy market legislation.

Poland’s treasury minister has already been dismissed for turning a blind eye (so to speak) to the preparations of this MOU. The Treasury Ministry oversees the state-owned PGNiG gas company, which happens to have a stake in EuroPolGaz. Indeed, the MOU was actually signed in St. Petersburg on 5 April, and PGNiG was fully aware of the process. This is where the farce began: In November 2012, a deal was struck between Gazprom and PGNiG in which Gazprom agreed to lower gas prices for Poland in return for a promise from PGNiG to withdraw a lawsuit against Gazprom at the Stockholm Arbitration Court and go along with plans for a new pipeline bypassing Ukraine. The pipeline part of this agreement was handed over to EuroPolGaz, which is a joint venture between PGNiG and Gazprom in Poland.

Recommendations: What this really means—and Ukraine is no stranger to such…

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