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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.

Existing and Planned Gas Routes to Europe

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 shenanigans—is that Poland’s state-owned gas company and EuroPolGaz are in Gazprom’s pocket. The government is now toying with the idea of setting up a new ministry to oversee the country’s energy policy, ostensibly to loosen the Russian noose. This is nothing short of a political crisis for Poland, which is not equipped (nor is Ukraine) to play this game with Gazprom, which is calling the shots here. What’s got Moscow riled here is Ukraine’s launch of gas imports from Europe, which has the Kremlin in a rush to cut off Ukraine’s gas transit potential. Russia was gambling that Poland would play along. Or, more to the point, that it’s influence through EuroPolGaz would give it the power to pull this off without the Polish government’s support. The Polish government has caught on, but this isn’t over yet.




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