About Russia - analysis

Russia builds up forces in Syria, 

The Russian Navy's missile corvette Mirazh sails in the Bosphorus, on its way to the Mediterranean Sea, in Istanbul, Turkey, October 7, 2016. REUTERS/Murad Sezer

By Jack Stubbs and Maria Tsvetkova | MOSCOW

MOSCOW Russia has built up its forces in Syria since a ceasefire collapsed in late September, sending in troops, planes and advanced missile systems, a Reuters analysis of publicly available tracking data shows.

The data points to a doubling of supply runs by air and sea compared to the nearly two-week period preceding the truce. It appears to be Russia's biggest military deployment to Syria since President Vladimir Putin said in March he would pull out some of his country's forces.

The increased manpower probably includes specialists to put into operation a newly delivered S-300 surface-to-air missile system, military analysts said.

The S-300 system will improve Russia's ability to control air space in Syria, where Moscow's forces support the government of President Bashar al-Assad, and could be aimed at deterring tougher U.S. action, they said.

"The S-300 basically gives Russia the ability to declare a no-fly zone over Syria," said Justin Bronk, a research fellow at the Royal United Services Institute (RUSI) in London.

"It also makes any U.S. attempt to do so impossible. Russia can just say: 'We're going to continue to fly and anything that tries to threaten our aircraft will be seen as hostile and destroyed'."

Russia's Defence Ministry did not respond to written questions. A senior air force official, speaking on condition of anonymity, dismissed talk of an increase in supply shipments.

But data collated by Turkish bloggers for their online Bosphorus Naval News project, and reviewed by Reuters, shows reinforcements sent via Russia's "Syrian Express" shipping route from the Black Sea increased throughout September and have peaked in the last week.

The data shows 10 Russian navy ships have gone through the Bosphorus en route to Syria since late September, compared with five in the 13-day period before the truce -- from Aug. 27 to Sept. 7.

That number includes The Mirazh, a small missile ship which a Reuters correspondent saw heading through the Bosphorus toward the Mediterranean on Friday.

Two other Russian missile ships were deployed to the Mediterranean on Wednesday.

Some of the ships that have been sent to Syria were so heavily laden the load line was barely visible above the water, and have docked at Russia's Tartus naval base in the Western Syrian province of Latakia. Reuters has not been able to establish what cargo they were carrying.

Troops and equipment are also returning to Syria by air, according to tracking data on website FlightRadar24.com.

Russian military cargo planes flew to Russia's Hmeymim airbase in Syria six times in the first six days of October -- compared to 12 a month in September and August, a Reuters analysis of the data shows.

 

INCREASED ACRIMONY

Russia sent its air force to support the Syrian Army a year ago when Moscow feared Assad was on the point of succumbing to rebel offensives. U.S.-led forces also carry out air strikes in Syria, targeting Islamic State positions.

Aerial bombardments in the past two weeks, mainly against rebel-held areas in the Syrian city of Aleppo, have been among the heaviest of the civil war, which has killed more then 300,000 people in 5-1/2 years.

Since the collapse of the ceasefire in September, acrimony between the United States and Russia has grown and Washington has suspended talks with Moscow on implementing the truce.

U.S. officials told Reuters on Sept. 28 that Washington had started considering tougher responses to the assault on Aleppo, including the possibility of air strikes on an Assad air base.

Russia deploys advanced anti-missile system to Syria for first time, US officials say

By Lucas Tomlinson

 Russia has deployed an advanced anti-missile system to Syria for the first time, three US officials tell Fox News, the latest indication that Moscow continues to ramp up its military operations in Syria in support of President Bashar al-Assad.

It comes after Russia's actions led to the collapse of a cease-fire and the cut-off of direct talks with the U.S.  

While Moscow’s motives are not certain, officials say the new weapon system could potentially counter any American cruise missile attack in Syria.

Components of the SA-23 Gladiator anti-missile and anti-aircraft system, which has a range of roughly 150 miles, arrived over the weekend “on the docks” of a Russian naval base along Syria’s Mediterranean coastal city of Tartus, two US officials said.

It is the first time Russia has deployed the SA-23 system outside its borders, according to one Western official citing a recent intelligence assessment. The missiles and associated components are still in their crates and are not yet operational, according to the officials.

The U.S. intelligence community has been observing the shipment of the SA-23 inside Russia in recent weeks, according to one official.

While the purpose is not clear, one US official asked sarcastically, “Nusra doesn’t have an air force do they?” speaking about the Al Qaeda-linked group in Syria.  The Islamic State also does not fly any manned aircraft or possess cruise missiles, in a sign that Russia is directing its actions to protect itself against any potential attack from the United States or its allies. 

The SA-23 can fire two different types of missiles. A smaller missile is used against aircraft and cruise missiles and is known by NATO as Gladiator. The larger missile is used against intermediate-range ballistic missiles and jamming aircraft and is known as Giant. Both missiles use the same type of warhead containing over 300 pounds of explosives, according to military-today.com.

Three years ago, President Obama weighed military action against the Assad regime’s chemical weapons facilities as well as airbases housing the regime’s attack helicopters and jets. US Navy ships in the eastern Mediterranean were prepared to launch Tomahawk cruise missiles in a limited strike to cripple the regime. 

Russia deployed a separate air defense system, the S-400, to Syria after a Russian jet was shot down by a Turkish warplane last November.  Since the S-400 deployment, the U.S. military has been careful about flying  manned aircraft inside the range of the system, despite repeated pledges by the US military that its airstrikes in Syria are focused on ISIS, not the Assad regime.

Monday, the Pentagon announced it conducted an airstrike potentially killing a “prominent” al-Qaeda linked operative in Syria.  Officials said they were still assessing the strike and have not released the name of their target.

Hours after the State Department announced it was cutting off talks with Moscow, President Vladimir Putin said he had suspended a Russia-U.S. deal on the disposal of weapons-grade plutonium. Putin's decree released by the Kremlin cited Washington's "unfriendly actions."

Top US officials have recently accused Russia and the Syrian regime of indiscriminant bombing in Syria using incendiary and bunker busting bombs on civilians. Two weeks ago, a UN aid convoy was bombed, killing dozens of aid workers attempting to deliver critical supplies to the more than 200,000 Aleppo residents trapped inside the eastern portion of the city, once Syria’s most populated. In the past week, hundreds of civilians, including children, have been killed, according to local reports.

Russia began its air campaign in Syria on Sept. 30, 2015 following a weeks-long buildup of fighter jets and attack aircraft.  Long-range bombers flying from Russia and Iran have also been used to attack Syrian rebels, some backed by the United States. 

Days after Russian bombs started falling in Syria, President Obama predicted that Russia and Iran would find themselves mired in a “quagmire.”

“[A]n attempt by Russia and Iran to prop up Assad and try to pacify the population is just going to get them stuck in a quagmire. And it won’t work,” he told reporters in a White House press conference on Oct. 2, 2015.

On Friday, the one-year anniversary of the Russian strikes, the State Department acknowledged that Russia had succeeded in its goal of propping up the Assad regime.

Russia warns US not to intervene as hospital is hit in latest Aleppo blitz 2 / 24

  

An unrelenting Russian and Syrian blitz of eastern Aleppo heavily damaged one of the city’s three remaining hospitals on Saturday, as Moscow warned that any American attempts to stop its assault would lead to “frightening tectonic shifts in the Middle East”.

 

The Russian raids struck at least five areas of the opposition-held half of the city, which is bracing for a ground assault by Shia forces allied to the Syrian regime. Syrian helicopters are believed to be responsible for the strike on the M10 hospital, which has left those who remain in the east with next to no access to essential healthcare.

Earlier in the week two other emergency centres and the only remaining maternity centre were bombed by jets, prompting a bitter response from US diplomats and vague claims that Washington was “reviewing options” about how to defuse a grave and deteriorating humanitarian crisis.

The attacks on Aleppo have worsened since the breakdown of a ceasefire brokered by Russia and the US that had barely lasted a week before Russian jets and Syrian helicopters attacked and destroyed an aid convoy that had been permitted to cross into an opposition-held part of the country. The US and Europe have said Russia is acting in flagrant breach of international law. Three days of phone calls between US secretary of state John Kerry and Russian foreign minister Sergei Lavrov have failed to slow the carnage.

Leaked recordings of Kerry speaking to Syrians in New York last week underscore the divide between US leaders over how to defuse the conflict and, in particular, how to stop the rampant attacks on civilian targets that continue to ravage much of east Aleppo.

Kerry is known to have advocated a more robust US role in the five-year war, especially after the gassing of more than 1,300 civilians in an opposition neighbourhood of Damascus three years ago. However, his calls have been rebuffed by President Barack Obama, who has repeatedly told his senior officials that nothing good would come out of the US taking a lead role.

A damaged field hospital room is seen after airstrikes in a rebel held area in Aleppo, Syria October 1, 2016. REUTERS/Abdalrhman Ismail In the recordings, which were published by the New York Times, Kerry is heard saying: “We are trying to pursue the diplomacy and I understand it’s frustrating. You have no one more frustrated than we are.” He said that the US had no legal justification for attacking the Assad regime, while Russia had been invited to join the conflict on behalf of the Syrian leader.

Kerry and other senior officials have recently argued that US attempts to stem the violence are being ignored and that citizens and some armed groups nominally supported by the US are being left defenceless by Russian and Syrian strikes. A Russian foreign ministry spokeswoman warned that “terrorists of all stripes” would fill the void if the US took a more robust stance.

The latest escalation comes on the first anniversary of the Russian intervention, which has been concentrated on northwest Syria and has transformed the battlefield across the country. Hailed initially as a campaign to confront Islamic State, the Russian role has been almost entirely aimed at defeating opposition to Assad, among them regular members of the armed rebel ranks and jihadist groups who often work among them.

Monitoring groups say that more than 3,000 civilians have been killed by Russian and Syrian attacks.

Flash: Putin Planning Rebirth of the KGB?

September 20, 2016

Geopolitical Monitor

 

A Russian paper has quoted anonymous officials claiming that President Putin plans to leverage his total control of the Duma to overhaul the state security bodies ahead of 2018 presidential elections. The envisioned reforms would see the creation of a Ministry of State Security, or MGB, which would take on many of the powers that formerly belonged to the KGB.

​

March 2016    How do you solve a problem like Vladimir Putin?It’s a question Western policymakers have been poring over since the Maidan protests ended a brief post-Cold War honeymoon period in East-West relations.The easy answer is to fall back on Cold War logic: Putin has opted for military confrontation in Ukraine, so the United States and its NATO allies must respond in turn by boosting their conventional deterrent on the continent. The size and positioning of this deterrent – the Fulda Gap, Poland, the Baltics – are secondary considerations. The main assumption here is that this is a problem that can be solved with more tanks and more jets.The hard answer requires a bit more thought. While it can be tempting to refer back to historical precedent, especially one as recent as the Cold War, doing so obscures the fact that the world has changed a lot since then.The nature of war has changed. World powers no longer measure their military girth by the number tanks or troops at their disposal. Since Desert Storm introduced the RMA to the world, the strategic onus has shifted to quality over quantity, with high-tech, interconnected platforms now at a strategic premium. Hell, the nature of war probably changed 50 years ago. Did the Cold War remain cold because of conventional deterrence in Europe or the threat of nuclear reprisals and MAD? Smart money is on the latter.Russia seems to have gotten the memo on this score. The Putin administration’s annexation of Crimea and not-so-covert support of Ukrainian rebels are two examples of atypical warfare achieving strategic goals without a large commitment of conventional forces. Moscow’s schizophrenic diplomacy and sleights on the battlefield, a modern take on maskirovka, have worked like a charm so far. Faced with this new playbook, Western planners should innovate rather than falling back on old modes of thinking.Ideology has changed. The Soviet Union championed an ideology that demanded the subjugation of nationalism in pursuit of a socialist ideal. Simply put there was an excuse to conquer other states in order to ‘show them the way.’ No such compulsion exists in Putin’s Russia, which has flipped the equation such that nationalism is the ideal.Ideology also informs the economic sphere. The Soviet Union and the West were antagonistic trading blocs during the Cold War; the same can’t be said of Putin’s Russia. Gone is the fundamental contradiction between communism and capitalism that precluded any Western investment in Russia and vice versa. And though modern Russia is increasingly an authoritarian state, the West can selectively ignore this if the price is right, much like it does for China or al-Sisi’s Egypt.And finally Europe has changed. The old bifurcation of East-West has given way to a complex matrix of economic and strategic interests. Where some states like Ukraine and the Baltics view Putin’s Russia as an existential threat, others like Italy and Germany see an economic opportunity; and the continent as a whole is still reliant on Russian energy imports.This complexity is easy for the Russian side to exploit, evident in how the Putin administration is driving wedges into the EU consensus on sanctions, and it simultaneously makes it harder for the United States to direct the flow of EU-US security relations. It also makes it very unlikely that EU states will come together and hike military spending, leaving Washington to foot the bill for Europe’s defense once again. If not tanks, then what?If EU-US relations are truly aligned enough to merit a shared “West” label, then the only way forward is to actually coordinate their policies on the diplomatic and economic fronts. The annexation of Crimea is a dangerous precedent for post-Cold War international society, and it should be the primary focus of ongoing EU sanctions against Russia (as opposed to the fate of the Minsk II process). These sanctions are already having the intended effect of squeezing the Russian economy; now it’s just a question of how long EU leaders choose to keep them in effect.Elsewhere, EU and US governments must recognize that Russia has an important and potentially beneficial role to play in other international conflicts. This will require some soul-searching about whether the cost of supporting non-EU and non-NATO member Ukraine is worth it. Right now the West is not doing Kiev any favors by extending enough support to inflame Russia but not enough to do anything about it. Either commit fully by offering extensive financial and, if necessary, military support in the form of weapons and training, or accept that Poland is the easternmost frontier of EU/NATO membership and Ukraine is a ‘no-go zone.’Russia’s military might pose a serious threat to its immediate neighbors, but not to NATO as a whole. Despite this fact, the Cold War approach of amassing conventional deterrence won’t be going away anytime soon. It benefits the vested interests who want to see a boost military spending (conventional platforms have been scaled back in the post-9/11 ascendance of asymmetric warfare), and it’s also comforting to those who want to ‘do something’ about Putin’s aggression – even if that ‘something’ is wasteful and entirely counterproductive.

 

Russia will seek to reintegrate the former Soviet republics into some coherent entity in order to delay its demographic problems, expand its market and above all reabsorb some territorial buffers. … Russia’s actions will cause substantial anxiety [for] its neighbors, both in terms of national security and its rapidly shifting economic policies.

 

Russia’s appetite for Ukraine

The view that Russian President Vladimir Putin has consolidated and strengthened Moscow’s power is commonly held and, indeed, holds much truth. Domestically speaking, Putin has effectively reconstituted Russian state power – aided in part by the appeal of his charismatic ‘strongman’ image. What has emerged is a system of competitive authoritarianism in which Putin governs through formal democratic institutions, but violates rules and processes to such an extent that his regime fails to meet universally accepted democratic standards.

In addition to an iron-fisted grip on domestic politics, the perception exists that Putin’s foreign policy is a testament to Moscow’s strength. For instance, Putin’s close association with the relative stabilization of Chechnya conferred on him the mantle of legitimacy and lent him popular electoral support. When Georgia launched a military offensive against the Russian-backed region of South Ossetia in 2008, Moscow’s response was swift. It deployed army and airborne troops, launched airstrikes, blockaded a part of the Georgian coast and landed marines. The Georgian Navy was handily defeated and on August 12, just four days after Russian forces entered the region, a ceasefire was negotiated.

Moreover, while there was much speculation in advance of the 2014 Sochi Olympics that a terrorist attack was inevitable, no such attack came about. High security at the Games not only deterred an attack, but also bolstered the image of Russian strength or ‘hard power’ in the region. The success of the Sochi Games also lent Russia a measure of ‘soft power’ or credibility that it had not previously enjoyed in the international community. This sensation did not last long, however. Any newly found soft power was squandered with the advent of the crisis on the Crimean Peninsula.

Until late February 2014, the mostly ethnically Russian Crimea was internationally recognized as an autonomous republic of Ukraine. After pro-Russian Ukrainian President Viktor Yanukovych was ousted, Russia denounced interim leader Yatsenyuk’s government as illegitimate and seized control of Crimea. A mid-March referendum saw 96% of voters express support for officially joining Russia; most countries and organizations, including the European Union and United Nations, denounced the referendum as an affront to Ukrainian sovereignty.

Russia stayed its course as reports surfaced of not-so-clandestine Russian fighters active not only in Crimea, but also in Ukraine itself. More recently, US intelligence indicates that the Malaysia Airlines plane that crashed in eastern Ukraine on July 17 was indeed shot down by pro-Russian separatists using an anti-aircraft missile.

The devastating crash and Russia’s policies and behavior under Putin confirm the assertion that Moscow acts to ensure that the “states right around [Russia] are friendly.” Putin will use the entirety of his coercive power to stabilize the Russian periphery, including the Caucasus and Crimea. However, Putin’s strongman reputation and reconstitution of the Russian state aside, we must question the unmitigated perception that Russia is an indomitable power in the region. The Chechnya conflict is a particularly useful lens through which to assess Putin’s rule and Russian strength.

Columbia University’s Kimberly Marten contends that Moscow’s choices in Chechnya since 2003 actually indicate profound state weakness rather than strength. From 1994 to 2009, the republic, a federal subject of Russia, was plagued by sporadic secessionist violence that devastated both infrastructure and the Chechen population. Russia, the crux of a former superpower, became mired in a conflict that was, by all accounts, supposed to be a swift and decisive victory.

The initial Russian response to the outbreak of insurgency in Chechnya is reminiscent of the Soviet war in Afghanistan a decade earlier. In fact, the conflicts share a number of similarities. Both the Soviet and Russian administrations aimed to establish a pro-Moscow government and stabilize the regions. Moreover, Russian forces were superior to their opponents in each conflict, in terms of both numbers and technological sophistication. But Russia’s great power approach, which emphasized conventional mechanized warfare, was ill-suited to the mountains and chaotic urban landscapes of Afghanistan and Chechnya. Insurgents, aware that they could not prevail in conventional warfare, capitalized on Russian authorities’ failure to adapt and innovate; they forced Russian troops into unconventional environments and situations, fostering costly and protracted guerrilla warfare. Compounding military failures in Chechnya was then-president Boris Yeltsin’s political mismanagement.

After assuming the presidency five years after violence erupted in Chechnya, Vladimir Putin declared, “My mission, my historic mission… is to resolve the situation in the Northern Caucasus.” From the outset, then, Putin displayed a keen personal interest in the region. Seeking to distance himself from the mismanagement and humiliation of the final years of Yeltsin’s administration, Putin assumed full responsibility of operations in Chechnya – a move that contrasts starkly with Yeltsin, who preferred to delegate responsibility in an attempt insulate himself from the consequences of conflict.

The situation in Chechnya in the early 2000s was rocky. Violence and burgeoning Islamic extremism spread beyond Chechen borders into neighboring republics, and there were a number of high-profile terrorist attacks in Russia itself. Despite outnumbering rebels fifty to one, Russian forces were unable to eliminate the small pockets of armed resistance that remained. While 2006 saw the deaths of rebel leader Shamil Basayev and Chechen President Aslan Maskhadov, it was clear that Russia’s conventional approach to armed conflict remained untenable if violence in Chechnya was to be stamped out completely.

To quell the conflict and accomplish his historic mission, Putin turned to new means of control. He augmented military operations with economic and political strategies, providing Chechnya with millions of dollars for reconstruction and installing local warlord Ramzan Kadyrov to power in 2007. Marten notes that by 2010, “Kadyrov… had legal command over the vast preponderance of security forces located in the republic… Moscow, in other words, granted Ramzan a virtual monopoly over the legitimate use of force in Chechnya, ceding the basic building block of sovereignty.”

Kadyrov is responsible for rooting out insurgents, winning over former rebels, and inspiring genuine popular support among a war-weary population. Through Kadyrov, Putin was better able to effectively stabilize Chechnya by augmenting military operations with economic and political strategy. The official argument of the Russian state is that Kadyrov stabilized Chechnya and, by extension, made Russia more secure, by making terrorist activities on Chechen territory more difficult and dangerous for the perpetrators. But Kadyrov’s personal militia is also renowned for using severe selective violence to target rebels and their families – a vicious and potentially volatile bedfellow for Putin in an already unstable region. Indeed, violence began to diffuse across Chechen borders around 2003, in part the result of Chechen insurgents and warlords seeking to destabilize the region in an effort to divert Moscow’s attention from Chechnya.

Speaking about the MH17 tragedy, President Barack Obama referred to the “steady flow of weapons from Russia” and held Putin accountable for the rebel’s actions. That Moscow provides arms and, potentially, other support, to unpredictable rebels is reminiscent of its devolvement of power to Kadyrov.

All told, it was not until 2009 – a full fifteen years after the outbreak of violence in Chechnya -that official counter-terrorism operations were declared at an end. Russia may not, strictly speaking, have “lost” the war in Chechnya, or the war in Afghanistan, for that matter. However, both Boris Yeltsin and Vladimir Putin failed to decisively win it. Conflict in Chechnya, and in the Caucasus more broadly, casts doubt on the widely held belief that Putin’s state is strong. Similarly, far from confirming Russia’s military prowess, escalating conflict in eastern Ukraine indicates an aggressively defensive Moscow with a shaky grip on its frontier regions.

Gazprom’s New Strategy of Control: Recapturing the EU Gas Market

July 13, 2016

Liubov Georges

 

Britain’s exit from the European Union is a huge blow to European project with potentially devastating implications for its’ latest flagship policy – Energy Union. The United Kingdom has been one of the strongest proponents of EU energy market integration, liberalization, and diversification. By using the power of consorted action, Energy Union was intended to confront gas monopolies, such as Gazprom, in the fight against price discrimination and market distortions. As fallout from Brexit rattles Brussels, Kremlin-backed Gazprom is well positioned to seize the moment to recapture this lucrative market for Russian gas. This article takes a closer look at recent developments in European Union energy policy and examines opportunities for Gazprom to gain a stronger influence over downstream energy relations in the continent.

The State of the Energy Union was created by the European Commission in February 2015 on the following promises: diversification through embracing LNG exports from alternative suppliers, market integration by building gas interconnections among EU member states, and ownership unbundling of critical gas infrastructure. Despite member states’ pledge for unconditional support of this policy, public support for the Energy Union has been dismal. The controversial Nord Stream- 2 pipeline along with Gazprom’s recent acquisition of strategic gas storage facilities within the EU have raised eyebrows across Europe’s capitals.  Delays in building critical gas transmission lines between northern and southern Europe further eroded public confidence in European Energy Union.

Yet, there have been some positive developments for this policy as a result of increasing competition and liberalization of the EU gas market. Eastern and central Europeans zealously embraced growing LNG exports from Qatar, Australia, and the United States. Preference for LNG over piped gas in Lithuania and Poland has already cost Gazprom billions in lost revenues from re-negotiating purchasing contracts. After commissioning “Freedom” LNG Terminal in Klaipeda, Lithuanian utilities were able to reduce the purchase price of Russian gas by 23%, from about 32.9 Euro per megawatt/ hr to 25 Euro per megawatt/ hr. Poland, which relies on Russian gas for 2/3 of its imports, recently announced that it would not renew its contract with Gazprom after it expires in 2022. Gazprom issued a press-conference immediately after the announcement to remind stakeholders that both Gazprom and Poland have ‘always found compromises’ since Poland began importing gas from Russia in 1948.

While LNG exports to Europe clearly strengthened the bargaining position of European governments vis-a-vis Moscow, they have not freed the continent from Russian gas. There are several reasons why this has not yet happened. There are strong headwinds against LNG in Europe, which include low energy prices and sluggish demand in the EU. Gazprom Chief Executive Officer recently took a swipe at American LNG saying that it will not a “panacea” for Europe, and suggested the company is ready to embrace the competition. Indeed, gas prices across Europe have fallen 37%, which does not favor a satisfactory return on investments in large scale LNG terminals. Many hope that LNG spot market could be competitive with piped gas in the long run as technology and economies of scale move forward. However, those EU countries that opted for LNG exports already today seem to prioritize geopolitical risk and security of supply over short term economic benefit. Regardless of the rational for LNG imports to Europe, member states have opted to set their own policy agenda instead of forming a unified front across Europe.

The lack of unified agenda has proved to be Europe’s “Achilles Heel” that Gazprom has been successfully exploiting.  In 2015 Gazprom supplied record volumes of gas to Europe- 158.56 bcm, which is 8% increase from 146.6 bcd in 2014. The bulk of these deliveries were to western Europe and eastern Europe took only 18%. Despite geopolitical tensions between Moscow and Brussels, Gazprom has been successfully implementing the strategy of “divide and conquer” with some powerful support within the European Union. Nord Stream-2 pipeline, a joint German-Russian project became the building block of that strategy, which runs contrary to the agenda of Energy Union. Stream-2 (annual capacity of 55 bcm) will deliver gas to Germany and western Europe, bypassing transit routes in Ukraine, Poland and Czech Republic, stripping them of transit payments.  Nord Stream-2 by design is a twin pipeline of already operational Nord Stream that is fed into the German grid connected to at least five transition pipelines (JAGAL, MIDAL, STEGAL in the east, WEDAL and Hamburg-Rehden in the west, all of which are controlled by Gazprom-Wintershall joint company Gascade Gastransport). However, current gas demand in Germany is rapidly declining due to competition from subsidized renewables and cheap coal. This energy equation makes additional gas volumes delivered by Nord Stream- 2 obsolete in Germany’s electricity generation and heating. What makes more sense for Germany is to transfer these gas molecules further west- to France and the Netherlands. Dynamic western Europe energy markets are also highly sought after destination for LNG producers. To prove the point of real destination for Nord Stream 2 gas, one simply needs to examine the planned gas infrastructure projects that will be constructed simultaneously with the Stream. In contrast with long awaited North-South corridor interconnections, these lines had no difficulty in quickly finding agreeable investors.  Stream-2 annual capacity perfectly matches combined capacity of 55 bcm of OPAL and NEL – new transit lines in German territory, which makes Gazprom an exclusive provider of gas to both lines. OPAL is slated to feed some volumes (via Gazelle) into the MEGAL pipeline (44-percent French interest), which runs from Bavaria into France. NEL (with 39-percent Dutch and Belgian interests) is planned to reach from northwestern Germany into the gas markets of the Netherlands and Belgium and potentially farther afield. By design OPAL and NEL could be fed only with Russian gas, transforming them and Germany into a new transit choke point of Russian gas in Europe.

Another building block of Gazprom strategy in Europe is the acquisition of strategically located gas storage units along OPAL and NEPAL route. In fact, these storage sites controlled by Gazprom in Germany are planned to operate in congruence with Gazprom-controlled transmission pipelines. Consequently, throughout the value chain of Nord Stream-2 there is only one dominant player – Gazprom – and risks to the ‘security of supply’ are not diversified among various actors but instead reside entirely with the Russian gas giant. According to the European Union’s Third Legislative Package gas, producers and suppliers cannot control the transport and storage infrastructure simultaneously. Yet, in the German case someone willingly turned the blind eye to Gazprom’s breach of the EU law.

There is no surprise that eastern European nations that lack access to gas supply from the Western Europe fiercely oppose this pipeline. In March 2016 leaders of Latvia, Lithuania, Poland, Czech Republic, Slovakia, Romania, Estonia and Hungary signed a letter of objection to European Commission. Their position was supported by western European governments that are not benefiting from the Nord Stream pipeline, which included Italy and United Kingdom.  The addition of the UK to the anti-Nord Stream 2 camp in Europe transformed it into truly meaningful opposition that had to be reckoned with.  It was expected that considerable pressure from a united western-eastern opposition to the pipeline would force Gazprom to make further concessions to eastern European countries in terms of price and contract terms. However, with Britain out of the European equation it becomes less clear how much influence the eastern European bloc can have on its own. The same logic applies to Gazprom strategy in Ukraine. The company announced that it would stop all gas supplies though Ukraine by 2019. It was expected that Russia might suggest that it would maintain supplies to Ukraine as long as there is an acceptable payment agreement; it could even be by a third party. Without coordinated action from EU member states on this issue it would be hard to find that responsible third party.

Consequent to Nord Stream 2 and tight partnership with German utilities, Gazprom is expected to increase its gas export capacity to Europe. By flooding Europe with gas, it will further depress gas prices on the continent. If Russia chooses to do so, it can easily price out LNG competition in short to medium term. By implementing the strategy of rapid export increases and picking out “partners in crime” Gazprom sends a clear message that it is in control of the European gas market. But it doesn’t have to be that way. Despite the shock waves Brexit has sent though the European Union it is essential for the remaining member states to maintain ambition and momentum of the Energy Union. Nord Stream -2 is a major step back for that policy but just because one builds a line, it doesn’t mean that it will be utilized. This will be a European choice that will not be controlled by any gas monopoly.