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GAS LNG Nord Stream 2 20 July, 2018 10:00 am   

Secret of Helsinki with LNG and Nord Stream 2 in the background


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We know that we know nothing. This is the main conclusion from the Trump-Putin talks in Helsinki, during which the US president admitted that the American LNG will compete with Russian gas in Europe and wished good luck to the builder of the contested Nord Stream 2, which he criticized a few days earlier at the NATO summit – Wojciech Jakóbik writes the editor-in-chief of BiznesAlert.pl.

Transcripts from Trump-Putin’s secret talks are not available and it is not clear whether the interviews have been scheduled. We only know what the presidents reported at a joint press conference. According to the presidential declarations, Trump again criticized the illegal annexation of Crimea in Ukraine by Russia, and Putin considered this topic closed. The lack of a chance to agree on this matter was the most important argument against the meeting in Helsinki, which should have never taken place.

Support for Russia’s arguments about LNG from the USA

The American president admitted that he intends to sell liquefied gas on global markets, which means that “we will (Americans – editor’s note) compete with the Nord Stream 2 pipeline”. In this way he fitted himself in the Russian line of argument. The Russians convince the world, along with Germany, that the US resistance against a pending project results from the egoistic will to sell LNG, meanwhile Nord Stream 2 is business and will support the development of the market. The US president’s statement about the fight against LNG is an extrapolation of the features of Russia’s gas policy on the US, which Trump agreed to in Helsinki. Meanwhile, as pointed out many times in BiznesAlert.pl, the US’s involvement in limiting Russia’s gas inflow in Central and Eastern Europe dates back to the Soviet era, when the Americans did not yet have to offer hydrocarbons for export. They are currently guided by the same motives, that is limiting the political influence of the Kremlin, which goes hand in hand with Gazprom’s influence. Trump’s words about LNG are, therefore, a similar blow to Western interests as his legitimately criticized defense of Russian hackers against charges by the US intelligence community for influence on the parliamentary elections.

Desinteressement about Nord Stream 2

In line with the fears presented in my text after the NATO summit, during which the US leader criticized Germany for his involvement in the controversial gas pipeline project, Donald Trump’s firm approach to Nord Stream 2 from Brussels replaced the conciliatory desinteressement in Helsinki. According to the Polish Press Agency, Trump, when asked about his earlier criticism of the gas pipeline, admitted that he was speaking “in a rather categorical tone” with German Chancellor Angela Merkel. “I am not convinced that this decision (about the construction of the gas pipeline) corresponds to all German interests or not, but they have taken it,” he said. He added that it will turn out “how this construction works”, and would like to wish the parties involved in the project good luck. This means that it is unlikely to impose sanctions on entities involved in this venture, but it is worth recalling that it did not signal their readiness to introduce them before the Helsinki summit. The reason may be the resistance of Europeans to such a solution.

No support for EC-Ukraine-Russia talks

One of the concerns of the West regarding Nord Stream 2 is the conviction that it will threaten gas supplies through Ukraine, and thus revenues to the Ukrainian budget and Ukraine’s stability. Meanwhile, President Vladimir Putin has made the guarantee of maintaining transmission through its territory subject to the end of the arbitration dispute between Naftogaz and Gazprom, which will not end until the end of 2019. This means that Moscow can play on time in tripartite talks between the European Commission and Russia-Ukraine on 17 July in Berlin. President Trump did nothing to improve the negotiating position of Ukrainians in talks about Nord Stream 2. And yet he had arguments. It is worth recalling that Denmark’s consent for the construction of the Nord Stream 2 section in its territorial waters is still lacking. If it is missing, a time-consuming revision of the trail will be necessary. BiznesAlert.pl informed, however, what Kommersant confirmed later that in 2019 the Nord Stream 2 branch of gas discharging in Germany (EUGAL) will be ready only in the middle, which means that the full capacity of the new gas pipeline will be achieved only in 2020, and provided that there will be no delays. This means that the Russians will be forced to maintain the minimum level of supply through Ukraine until the German route is completed.

We know that we know nothing

After the tragic speech of Donald Trump in Helsinki, we still know that we know nothing. It is not known how Trump’s opinions on LNG supplies from the USA are the position of the entire administration. At the EU-US summit, the secretary for energy Rick Perry presented different views on the sidelines of the NATO meeting in Brussels. Meanwhile, Trump gave the impression that he was reflecting the slogans from his election campaign without a reflection that hydrocarbon exports would drive the US economy. The US president has no influence on LNG companies, unlike his Russian counterpart on Gazprom. Contracts for the supply of liquefied gas do not depend on Donald Trump. Perhaps, therefore, the rhetoric about rivalry with Nord Stream 2 is calculated on the reaction of the electorate in the country.

It is not known whether the swing of sentiment towards Nord Stream 2 will stop. It can not be ruled out that after receiving the cross-party criticism in Washington, the US president will want to demonstrate strength in relations with Russia and make another volta. We know, however, that one can not be sure of his words on this subject. It is worth remembering that the American administration operates on the basis of the system of Montesquieu’s separation of legislative, executive and judiciary authorities. You can expect Congress’s response to Trump’s actions at the meeting with Vladimir Putin.

We do not know whether Donald Trump negotiated anything unilaterally in talks with Vladimir Putin, or how he could enforce any promises. He could count on a deal, for example, on the Iranian ostracism in the Middle East, again – for reasons of internal politics and the will to please the hard Republican electorate. Here too, the energy theme appears. The Americans are appealing to oil producers from the OPEC oil cartel and Russia to increase output in response to the expected decline in the supply of raw material caused by a return of sanctions against Iran. I wrote that because of the expectations of the Helsinki summit, Trump will become Putin’s hostage. In the case of oil, he becomes a hostage to Saudi Arabia and Russia, which is dependent on a possible replenishment of oil shortages in the market caused by the blocking of Iranian exports.

The unpredictability of the US president becomes dangerous to the United States and the transatlantic community. This was confirmed by the meeting with Vladimir Putin in Helsinki. Everything Trump did there unilaterally can harm the multilateral internal relations of the West.