Ukraine signs new gas deal - with RWE of Germany!

You will remember back in early March I mentioned a cunning plan from the government of Ukraine to buy gas from RWE in Germany and reverse the flow of sections of the transport system in order to import it, thus reducing the amount of contractually very expensive Russian gas?

Well, Naftogas Ukraine has quietly signed an agreement earlier this month with RWE  just as predicted.

Now then, what are the chances of Turkish LNG being shipped Bulgaria and reversing the flow back to Ukraine (another option) until the Odessa LNG terminal is build?

Bold political and energy moves indeed, as it will certainly annoy the newly installed Mr Putin and Gazprom who have happily been milking Ukraine for the last few years.

Let’s see what the Russian response will be!

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As an aside, if you read yesterday’s post and are wondering what the outcome of the EU-Ukraine summit was, here is the official press release.  No surprises in it just as it was no surprise the EU Euro 2012 boycott failed to take off.

What should be clear to the EU by now is that the current government is quite happy to, and indeed is doing quite well at, creating the legislative norms that run parallel to those of the EU and as such the DCFTA side of the EU/Ukraine negotiated agreement will continue to progress fairly well.  The political AA side of the agreement will not progress much at all.  All such signs are documented by the EU itself in its ENP Country Progress Report - Ukraine!

Quite a contrast to the previous government where the political integration was far more achievable, but it was also a government completely unable to to draft and pass anything like legislation meeting EU norms.

Given both sides will continue to have the same strengths and weaknesses, it would seem a reasonable tactic to encourage the current government along the legislative reformation path as much as possible, and then hope for a change of government who are legislatively incompetent but will politically meet the grade.

Failing that, sooner or later the EU will realise that financial investigations and the seizure of nefariously acquired or hidden  assets held within the EU territory relating to all Ukrainian politicians, from all parties, will be the most feared stick they have in their bag that may force Ukrainian politicians to go along the EU’s preferred path regardless of their strengths or weaknesses. - Now there’s a bold policy step!

(Alternatively, the EU can just let Ukraine drift back to Russia and watch it help make the Eurasian Union become a workable model.)

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