Lukashenko says he may quit as president
Belarus hits EU with tit-for-tat sanctions
Belarusian police introduce colour-coded torture system for detained protesters
Kremlin publicly condemns Belarusian police brutality in hint of growing frustration with Lukashenko
Russian services PMI rises to 48.2, but remains underwater as recovery continues to slow
Russia to start mass vaccinations on December 7
Azerbaijan’s Aliyev calls on Armenia, Russia, Turkey and Iran to assist in creating Nakhchivan land corridor
FPRI BMB Russia: Sberbank releases a three-year transformation strategy to e-commerce concern
Ukraine’s banking sector continues recovery, but profits still lagging last year
Ukraine’s real wages up over 10% in October but have been stagnant in dollar terms for almost a year
FPRI BMB Ukraine: Public has confused opinions on resolving the Donbas conflict
Western Balkans plus Ukraine subsidised coal with over €900mn in 2018-2019
Estonian parcel robot firm Cleveron eyes €30mn state loan
Estonia’s chief auditor says €1bn in state COVID-19 loans issued haphazardly
Economic sentiment in CEE falls in November as recovery momentum splutters
Estonian animation studio Imepilt to hold IPO
Brighter days ahead: The economic bounce back in 2021
Central, Southeast Europe stock markets jump in anticipation of COVID-free future
VISEGRAD BLOG: An easing of trade tensions but still an uncertain situation for export-oriented Central Europe
Hungary's PM risks isolation as Poland mulls dropping EU budget veto
Poland ready to back down from veto of EU budget
Hungary's ruling party in damage control mode after MEP sex scandal bombshell
Poland’s PMI remains stuck just above the improvement line at 50.8 in November
Czech companies dominate this year’s Deloitte Technology Fast 50 CE
Coronacrisis to get worse before it gets better forecasts wiiw
EU diplomats say no chance of Bulgaria removing veto for Skopje to start EU accession talks
IMF says downside risks to Albanian economy are increasing
EU ministers fail to agree on launch of accession talks with Albania and North Macedonia
Western Balkans commit to green agenda and regional common market at Sofia summit
Bosnia’s opposition ousts nationalist parties in major cities
Bosnia’s main ethnic parties fight to hold onto power in local elections
Southeast Europe’s EU members to get biggest boost from next budget and recovery funds
Bulgaria imposes 3-week lockdown to slow down COVID-19 spread
CEE politicians highlight trade and security ties as they congratulate Biden
Breakaway Transnistria fully under Sheriff’s control as Obnovlenie party sweeps board in parliament election
Moldova’s presidential election is over, now the battle for the parliament begins
Moldova’s foreign policy reset
Russian establishment quick to congratulate Moldova's new president-elect
Rising COVID-19 cases put intense pressure on CEE healthcare systems
MEPs urge European Commission to act against Hungarian media financing in North Macedonia and Slovenia
North Macedonia mulls decriminalising cannabis to boost tourism
Retail surpass pre-crisis peak as Romanians shop instead of holiday
Romanian venture capital firm Catalyst launches new €40mn-50mn fund for TMT
Aegon to sell its CEE business to Vienna Insurance for €830mn
The state is back in business
Slovenian PM Jansa stands alongside Hungary and Poland in EU rule of law row
BEYOND THE BOSPORUS: Turkish number crunchers deliver November inflation surprise of 14%
Erdogan needs to go says analyst assessing Turkey’s economic collapse
Ukraine strikes deal with Turkey to produce killer drones instrumental in Karabakh conflict
In Karabakh deal, as many questions as answers
Protesters flood Yerevan demanding Armenia’s “traitor” PM quit over Nagorno-Karabakh surrender
Who emerge as the real winners from the bloody Nagorno-Karabakh conflict?
Below average 2020 wine production destined for volatile and uncertain global market
Iran calls on Saudis to limit $67bn defence spending to Tehran’s $10bn
Iranian prosecutors pledge to pursue Trump for Soleimani killing even after he leaves White House
No reaction from Kazakh elites as bombshell FT report says Nazarbayev’s son in law siphoned millions from pipeline scheme
UK court freezes $5bn in assets connected to fugitive Kazakh banker Ablyazov
Attack of the Debt Tsunami: global debt soars to a new all-time high
Kyrgyzstan's proposed new constitution provokes widespread revulsion
Kyrgyzstan's China debt: Between crowdfunding and austerity
CFC joins RWC in assessing KAZ Minerals buyout offer as under-valuation
China business briefing: Not happy with Kyrgyzstan
Mongolian coal exports to China paralysed as Beijing demands virus testing of truck drivers
Mongolia fears economic damage as country faces up to its first local transmissions of coronavirus
Mongolia in lockdown after suffering first local coronavirus transmissions
Mongolia’s wrestling culture: From the grasslands to the cage
No surprises in Tajikistan as Rahmon retains presidency with 91% of vote
A Tajikistan poised on verge of economic calamity set for vote
Tajikistan revives on-off dispute with Iran
Turkmenistan: The dammed united
Turkmenistan: Everybody yurts, sometimes
Dirty money investigation reviews identified payments worth $1.4bn linked to Turkmenistan
Uzbekistan unveils extensive privatisation programme
Download the pdf version
Poland's anti-competition authority and Russia's Gazprom could be stuck in arbitration for years
What: Polish regulator UOKiK has slapped a $7.6bn fine on Gazprom for going ahead with Nord Stream 2 without its permission.
Why: Poland, a staunch opponent of Nord Stream 2, says the pipeline will have a negative effect on its gas market.
What next: Gazprom has vowed to appeal against the decision, making a lengthy arbitration case likely. But the dispute will have little bearing on Nord Stream 2's completion.
Poland and Russia look set for a lengthy and arduous legal dispute, after Polish antimonopoly watchdog UOKiK last week slapped Kremlin-run gas supplier Gazprom with a $7.6bn fine for going ahead with the Nord Stream 2 pipeline without its consent.
Poland’s efforts will have little bearing on the controversial project, however, given that UOKiK lacks jurisdiction to halt its construction, which is now almost complete. And in any case, Gazprom has vowed to appeal against the regulator’s decision, initiating an arbitration process that could take five or so years to reach a conclusion.
The crux of UOKiK’s argument is that Gazprom created a de-facto joint venture with its European partners to finance Nord Stream 2. Gazprom’s original plan was to form a consortium with Germany's Uniper and Wintershall Dea, Royal Dutch Shell, Austria's OMV and France's Engie to finance, build and operate the €9.5bn ($11.2bn) pipeline. UOKiK’s approval was needed because of Nord Stream 2’s impact on the Polish gas market. It withheld this approval in 2016, forcing Gazprom to come up with a different plan.
Instead, the Russian company was lent funds by its European partners to cover half of Nord Stream 2’s cost, but UOKiK argues that these financing agreements effectively established a joint venture in all but name. The regulator said it had imposed the maximum penalty it could on Gazprom. It has also fined the company’s European partners some PLN234mn ($62mn), representing 10% of the annual turnover of their subsidiaries involved in Nord Stream 2.
Poland is among the staunchest opponents of Nord Stream 2 and Russian influence in Europe. Polish officials argue that Nord Stream 2 will undermine competition in Poland’s gas market, and also enable Gazprom to divert gas supplies to Europe that currently flow through Poland, robbing Warsaw of billions of dollars in transit revenues. The project would also increase Europe’s dependence on Gazprom for gas, UOKiK argues.
“Such a situation may bring about serious consequences for the economy of Poland and of the EU, in particular by introducing territorial restrictions affecting the delivery of natural gas, and by increasing the prices of gas to end customers, in particular to Polish consumers,” the regulator said. “The high cost of implementing the undertaking may be offset by higher bills paid by Polish recipients of gas, and the negotiating position of ... Gazprom will be strengthened considerably both in relations with Poland and with other EU member states.”
How great an impact Nord Stream 2 would have on the Polish market is doubtful, however, given that Warsaw is striving to end its reliance on Russian gas anyway within a few years.
Poland consumed some 18.6bn cubic metres of gas last year, while it produced some 4.1 bcm domestically. A further 9 bcm was supplied by Gazprom, while the remainder was met with 3.4 bcm of LNG imports and 2.5 bcm via interconnectors with Germany, the Czech Republic and Slovakia.
Poland’s long-term contract for Russian gas is due to expire at the end of 2022, and state gas supplier PGNiG does not intend to extend it. While Poland would still be able to make spot purchases from Gazprom after the contract’s expiry, its government has insisted it will not take any Russian gas at all.
“If we are talking about full diversification of gas supplies to Poland, we are talking about Poland’s full gas independence from Russia; this is the milestone on the way towards the independence,” Polish President Andrzej Duda said earlier this year.
To break gas ties with Russia, Poland has a raft of projects underway that will greatly expand its gas import capacity over the coming years. It plans to launch Baltic Pipe in October 2022, a pipeline from Norway that will provide Poland with some 10 bcm of gas annually. A final investment decision (FID) on the project was taken in 2018, and early construction work is underway.
Poland also intends to enlarge its Swinoujscie LNG import terminal to take an extra 3.3 bcm per year of gas beginning in 2023, and build a second, 4.5 bcm per year terminal in Gdansk by 2026-2027. Baltic Pipe alone could be enough for Poland to cut its Russian gas supplies to zero as early as 2023, and the government wants to resell any surplus LNG it imports to Ukraine and its other neighbours.
The prospect of potentially having to pay a large fine in a few years will undermine Gazprom’s share price performance and its credit rating. But UOKiK’s actions alone will have little impact on progress at Nord Stream 2. Even so, the project faces significant other obstacles to its completion.
The pipeline’s offshore section reached 94% completion in December last year before the US imposed sanctions, forcing Swiss pipelayer Allseas to halt construction. Russia has its own pipelaying vessels on standby in northern Europe to finish the job, but it is unclear whether they have the capability to do so without international assistance. Looming over the project, a bill is making its way through US Congress that would impose even tougher sanctions.
Russian authorities say Nord Stream 2 will be ready to flow gas in early 2021. But Gazprom is stuck in a ship-or-pay contract with Ukraine until the end of 2024, meaning it will have to pay to deliver at least 40 bcm per year of gas through the country between 2021 and 2024, regardless of how much it actually sends. This will limit how much gas it is feasible for the company to supply via Nord Stream 2.
Then there is the EU regulatory headache. Nord Stream 2 will have to comply with the bloc's energy law following a court ruling last year, which could require Gazprom to provide third-party access to its capacity. It is unclear how Russia could ensure this without breaking up Gazprom’s monopoly over pipeline exports.
Lastly, Germany's support for the pipeline could crumble, not only in light of the recent assassination attempt on Russian opposition figure Alexei Navalny, but more significantly because of rising antipathy towards fossil fuels. Rather than derail the drive towards cleaner energy, the coronavirus (COVID-19) crisis has prompted governments to set more ambitious targets than ever before. This could lead Berlin to rethink its position on extra gas import capacity.
This article is from Newsbase’s FSUOGM monitor, a bne IntelliNews sister company that produces weekly reports on the oil and gas sector in the former Soviet Union countries.
Newsbase produces a family of newsletters that cover the energy sector worldwide. A premium service, you can take a free month’s trial by sending an email to subscription’s director Stephen Vanson.
See a sample here.
here to continue reading this article
and 5 more for free or purchase
12 months full website access including
the bne Magazine for just $250/year.
Register to read the bne monthly magazine for
Password could contain only
and have 8-20 symbols length.
Please complete your registration by confirming your
A confirmation email has been sent to the email
address you provided.
can't be empty.
No user with
this email address.
Access recovery request have been expired. Please,
Access recover request have been expired.
Please, try again.
To continue viewing our content you need to complete
the registration process.
Please look for an email that was sent to
with the subject line
"Confirmation bne IntelliNews access". This email will have
instructions on how to complete registration
process. Please check in your "Junk" folder in
case this communication was misdirected in your
If you have any questions please contact us at firstname.lastname@example.org
Sorry, but you have used all your free articles fro
this month for bne IntelliNews. Subscribe
to continue reading for only $119 per year.
Your subscription includes:
For the meantime we are also offering a free
digital weekly newspaper to subscribers to
the online package.
Click here for more subscription options,
including to the print version of our
flagship monthly magazine:
Take a trial to our premium daily news
service aimed at professional investors that
covers the 30 countries of emerging
For any other enquiries about our
products or corporate discounts please
contact us at
If you no longer wish to receive
Magazine annual print
Website & Archive
Combined package: web
access & magazine print
Take a trial to our premium daily news service
aimed at professional investors that
covers the 30 countries of emerging Europe: