From Republic.ru, Dec. 9, 2022, https://republic.ru/posts/106428. Complete text:
It’s déjà vu all over again. Only recently, Russian President Vladimir Putin advertised a “tripartite [natural] gas alliance” with Kazakhstan and Uzbekistan, and now both partners are denying plans to form a new bloc – and there may be more backstabbing to come.
The grand announcement about a “tripartite gas alliance” was made after the presidents of Kazakhstan and Russia met in Moscow [on Nov. 28]. Kazakh President Kasym-Zhomart Tokayev’s spokesman, Ruslan Zheldibai, said the two presidents discussed the possibility of such an alliance between Russia, Kazakhstan and Uzbekistan. This report was also confirmed by Russian presidential spokesman Dmitry Peskov. Russian Deputy Prime Minister Aleksandr Novak explained why the idea makes sense: The three countries have been sharing a common gas transit system since the days of the Soviet Union, and it can be used, for example, to export Russian natural gas to China.
In fact, it is the need to reorient Russian gas exports from Europe to Asia that is forcing the Russian authorities to look for solutions. Existing infrastructure will be sufficient to reroute half of the gas that used to go to the European Union. So Russia needs to find buyers for the other half. Uzbekistan should be interested in buying some gas from Russia because it is facing a gas shortage right now. Uzbekistan produces about 52 billion cubic meters of gas a year, importing another 4 billion cu.m and exporting 2.7 billion cu.m. Recently, due to cold weather, Uzbekistan had to suspend its exports of 6 million cu.m a day to China. Kazakhstan would also love to become a distribution hub for the Russian gas exported to Asia, especially since Kazakhstan exports its oil through the Caspian Pipeline Consortium’s (CPC) pipeline, which runs through Russia, and it doesn’t want any problems with transporting oil across Russian territory to arise.
Calling the new bloc a “tripartite alliance” was perhaps a bad idea, as the term has a negative connotation. Just a few days later, on Nov. 30, Kazakh Deputy Foreign Minister Roman Vasilenko basically denied earlier statements not only by Russian but even by Kazakh officials. “It is Kazakhstan’s principled position that we do not allow our territory to be used to circumvent sanctions,” he said. He added that it was common in diplomatic practice to voice all sorts of ideas, “which have to be carefully examined by specialists before the government makes an official decision.”
And now Uzbekistan, too, has rejected the idea of an alliance that would help Russia circumvent sanctions.
Uzbekistan will never accept any political conditions that would endanger its national interest in exchange for gas, and even if the countries reach an agreement on gas exports, this certainly won’t mean that Uzbekistan is joining some sort of alliance, Uzbek Deputy Prime Minister Zhurabek Mirzamakhmudov said.
It’s truly an amazing story, whichever way you look at it. First, the presidents of two countries agreed to form a tripartite alliance. Clearly, such ideas never come out of nowhere, from small talk. Before any public announcement could be made, the proposal must have been carefully examined by the parties. Numerous comments by top-level Russian officials confirming the report indicate that this announcement was intended as the final act of the play, not its opening scene. But the very next day after Tokayev’s visit to Moscow, his statement (albeit voiced by his press secretary, not by Tokayev himself) was repudiated by the deputy foreign minister; and then a week later the Uzbek deputy prime minister denied the news. The presidents, in the meantime, are keeping mum on the affair.
This is not just humiliating for Russia. It may mean that, once the plans for a “tripartite gas alliance” were announced, the West responded by clearly explaining that such a consortium will be regarded as an attempt to circumvent the sanctions imposed on Russia, which, in turn, will result in secondary sanctions.
Thus, we see once again that all the claims about Western sanctions being ineffective are totally untrue.
The West “has not even started anything in earnest,” to borrow an expression from President Putin. Russia may try to set up shady mechanisms to circumvent sanctions, but these will only work with unimportant imports, like consumer goods, or with smaller quantities (for example, there are rumors that Russia is somehow still managing to import small amounts of chips for its missiles). But when it comes to major and regular deliveries of important items, sanctions are quite effective.
Another conclusion we can draw from this situation is that Russian gas is now toxic, no matter what you do, and other countries are either refusing to buy it altogether or are demanding a lot of concessions in return. We can only speculate about the price that China pays, but since we know how tough Chinese negotiators usually are, we shouldn’t doubt that they are taking full advantage of Russia’s vulnerable position. Turkey, on the other hand, is not making any secret of its demands: It wants either 25% off the price, or permission to defer its payments until 2024.
In addition, Hungary, Russia’s most loyal defender in the EU, may soon stop buying Russian gas. Instead, it wants to build a pipeline to Slovenia, which gets gas from Italy. It usually takes about five years to build a pipeline, but it could take two to three years if work is done double time.
It will be interesting to see whether Hungarian Prime Minister Viktor Orban remains so committed to Vladimir Putin once his country weans itself off Russian gas.
The pipeline from Slovenia to Hungary will go through Croatia (which has a major liquefied natural gas terminal on the island of Krk), very close to Serbia. So, it is quite possible that Serbia will decide to join the project later on. President Aleksandar Vucic has repeatedly stated that Serbia should diversify its gas supplies. Incidentally, Serbia will start importing Azerbaijani gas in 2023. In addition, Serbia has its own gas field in the Banat District, which is currently owned by NIS, a company that Gazpromneft bought years ago. The acquisition involved a major corruption scandal. Vucic says Serbia may have to nationalize NIS in order to avoid secondary sanctions.
A healthy wife and a wealthy sister are the two greatest blessings, as the saying goes. It seems like politicians in many of the countries that Russia deems “friendly” feel the same way. Of course, it would be nice to have Russian gas. Only they want it cheap and without the threat of secondary sanctions. By the way, the same goes for oil. And many other things, as well.