Ukrainians fear betrayal over Putin’s pipeline

The prospect of NATO and US-Russia summits in mid-June is creating anxiety in Ukraine, which finds itself in the role of bystander despite the nation’s prominent position on the agendas for both meetings. The news on June 7 that US President Joe Biden has invited his Ukrainian counterpart Volodymyr Zelenskyy to visit the White House later this summer is certainly welcome, but many concerns remain.

“I would have preferred it if Biden met with our president before meeting with Putin, but it is better than no meeting. It’s a good sign and important because Ukrainians felt abandoned. At least we are now being shown that we are still an important partner for the US,” comments Yuriy Vitrenko, who was recently appointed as CEO of Ukraine’s energy giant, Naftogaz. In his new role, Vitrenko finds himself at the heart of the geopolitical struggle over Russia’s Nord Stream 2 pipeline. The outcome will have major consequences for Ukraine’s future.

Speaking to the Atlantic Council, Vitrenko shared his thoughts on Vladimir Putin’s pipeline politics, President Biden’s recent decision to waive some Nord Stream 2 sanctions, and Russia’s aggressive tactics in the lead-up to next week’s US-Russia summit in Switzerland.

In recent weeks, two cyberattacks were mounted from Russian soil, allegedly by criminal ransomware groups. Putin has also strongly backed Belarus dictator Alyaksandr Lukashenka’s crackdown on dissidents and his May 22 grounding of an EU airliner in Belarusian airspace in order to arrest a dissident journalist.

Putin’s intention has been to gain the upper hand before the summit, says Vitrenko. “He wanted to start negotiations with Biden from a strong position. Put pressure on, gain ground, and then say ‘maybe I’ll give you concessions.’ But basically he would just be giving back a part of what he gained unlawfully.”

Last month’s White House decision to cede ground on Nord Stream 2 sanctions surprised many observers, notes Vitrenko. Critics have accused Biden of giving Putin what he wants before the summit.

Meanwhile, Vitrenko says the decision to exclude Ukraine from participating in upcoming NATO meetings, together with the failure to provide the country with a clear path towards membership, is unfair and dangerous. “To keep Ukraine out of Europe’s defense bloc is to say `I don’t want Ukraine to be able to defend itself and I don’t want anybody else to help Ukraine defend itself.’ That is not justice.”

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In early June, Ukraine’s President Zelenskyy told US Senators visiting Kyiv that the country’s military defense against Russia and the completion of the Nord Stream 2 pipeline are directly linked. Once the project is finished, Ukraine will be deprived of revenue needed to finance defense spending and secure Europe’s eastern border. “Nord Stream 2 will disconnect Ukraine from gas supplies, which means “disconnecting” us from at least USD 3 billion a year. We will have nothing to pay for the Ukrainian army,” Zelenskyy commented.

Vitrenko says he is certain Russian gas will no longer flow through Ukraine once Nord Stream 2 is built and the current five-year contract is finished in 2025. Ukraine’s Interior Minister Arsen Avakov recently predicted that Russia may not even complete the present contract. He warned that Moscow could sabotage the Ukrainian pipeline network in order to prevent gas transit across the country and strengthen the case for Nord Stream 2.

Vitrenko questions the logic of the White House decision to relax pipeline sanctions so close to Germany’s forthcoming September 2021 elections. “Given the importance [to the US] of a good relationship with Germany, from a tactical point of view, the US should have halted the pipeline until a new German coalition is formed after the election which will reflect the views of the German people. It makes no sense to ease sanctions now because a new political reality will soon exist in Germany.”

There is strong opposition to the pipeline in Germany from the Greens and from environmentalist groups. However, Vitrenko is not convinced this will prove sufficient to derail Nord Stream 2. “I’m not optimistic that environmentalists and the Greens can stop it. I would have more hope if the new coalition includes the Greens, or it increases its support.”

Loss of Russian gas transit will be a major economic blow to Ukraine. It will also give Putin a much freer hand militarily and could pave the way for a major escalation in the simmering seven-year conflict between the two countries. Both Russia and Germany have repeatedly stated that gas transit through Ukraine must continue once Nord Stream 2 enters service, but it is difficult to see how these pledges can be enforced.

Speaking at an economic forum in early June, Putin appeared to question the future of Russian gas transit through Ukraine, stating that this will depend on Ukrainian “goodwill.” Norbert Rottgen, Chairman of the Bundestag’s Foreign Affairs Committee, was one of many to comment on the Russian leader’s readiness to underline the geopolitical role of the pipeline. “Putin blackmails Ukraine before Nord Stream 2 has even been finished. He uses the pipeline as exactly the kind of weapon that the Poles, Balts and Ukrainians have always believed it to be,” tweeted Rottgen.

Commercially, Nord Stream 2 will give Gazprom the dominant position in Europe, providing it with considerable leverage over Germany and other EU countries, argues Vitrenko. The only way to avoid this outcome is if Ukraine is granted access to gas from other gas-producing countries such as Turkmenistan, Kazakhstan, or Azerbaijan, who would willingly use Ukraine’s transit system to sell gas to Europe.

“Germany should make sure Gazprom cannot block us,” Vitrenko says. “They must do this before Nord Stream 2 is completed, while Germany still has the necessary leverage. It’s incumbent on the Germans to impose a moratorium until this sort of competitive solution is put in place.”

If Russia refuses to cooperate, it would demonstrate that Nord Stream 2 is primarily a geopolitical weapon designed to hurt Ukraine and monopolize Europe’s energy markets, Vitrenko argues. “We in Ukraine have a transit system. We are saying let us compete to bring other gas suppliers into Europe.”

Vitrenko is under no illusions that Nord Stream 2 will be damaging for Ukraine. “A lot of Ukrainians will feel betrayed. If they cut the gas off, Ukraine will lose GDP and have to invest a great deal in making the system operational. People won’t die or freeze. We will still be able to import gas from Europe, but of course it will be a huge blow.”

The Naftogaz CEO sees the controversial pipeline project as a test case for the credibility of the democratic values often championed by leading Western nations. “It will be really sad if Nord Stream 2 now becomes an example of Germans making a deal with Russia at the expense of Ukraine, and then the US making a deal with Germany.”

Next week’s summit meetings will likely go a long way towards determining the future of Nord Stream 2 and a range of other issues that will impact Ukraine. Like many Ukrainians, Vitrenko is highly skeptical of Western attempts to reach some kind of win-win compromise with the Kremlin. “The truth is that Russia only understands force. The US and the rest of the democratic world should show strength and unity. That is the only way to change Russia’s malign behavior.”

Diane Francis is a senior fellow at the Atlantic Council’s Eurasia Center, Editor at Large with the National Post in Canada, a Distinguished Professor at Ryerson University’s Ted Rogers School of Management, and author of ten books.

Further reading

Image: Pipes for the Nord Stream 2 pipeline are loaded onto a ship at Mukran port on June 1. (Stefan Sauer/dpa via REUTERS)