The ENERGY parameter is at the heart of the crisis between Russia and Ukraine according to international analysts, being not just a form of repetition of the continuous conflicts between the two countries in recent years, but also extending and expanding due to the energy dependence on Russia, and the surrounding territory the European Union.
Apart from the colossal politico-economic interests lurking in the wider eastern region of Ukraine, the major issue of energy and “energy dependence” seems to be once again the cause of tension which generates inherent risks and even for war.
The natural gas that Ukraine imports from Russia covers 60% of its domestic needs, inevitably is creating thereby a strong energy dependence, while at the same time constantly reinforcing the side that seeks energy independence and advocates for exploration of alternative sources for the supply of natural gas.
Despite the privileged prices for natural gas transported in Ukraine with Gazprom’s pipelines, to the Ukrainian public company Naftogaz, Kiev seems to owe up to $ 2 billion to Moscow, and the new government of Kiev, which does not recognize the Russian government, is unable to repay, at least at the moment.
The European course of Ukraine over the past twenty years, acts as a comparison to the objective reality and Ukraine’s need of maintaining its energy relations with Russia. As a result, Ukraine is transformed to a crossroad of transit gas pipelines installed in its territory from the Russian Gazprom, pushing Europe into becoming depended on Ukraine in terms of transition, but also energy dependent to Russia, importing around 30% of its natural gas and significant quantities of oil, in contrast to the downward trend of domestic gas supply from countries within Europe such as Britain and Norway.
It is calculated, that by 2020 the EU will be depended on Russia for more than 40% of its needs for natural gas supply. On the other side, at the same time, Russia is economically dependent on Europe as it is the largest energy client and wishes to ensure the transit of gas to the European Union either through Ukraine or through other channels, as a reliable energy supplier of Europe.
The EU and Russia are co-dependent in regards to energy and the efforts of Moscow so far, to bypass Ukraine in order to have direct access to European gas markets, came to an agreement with Germany in agreed in 2005 in cooperation with the German E.ON and BASF and French GDF Suez, to construct the Nord Stream pipeline, exporting Russian gas directly to Germany via the Baltic Sea. On the same basis Russia is ready to proceed with the construction of the South Stream undersea pipeline from Russia to Bulgaria and other European countries through the Turkish EEZ in the Black Sea, bypassing Ukraine, thereby serving its best customer, the European Union.
Coming back to Cyprus, it could be ascertained that it now becomes potentially one of the EU countries that may supply its European partners with energy, something which substantially enhances both its economic and political role. The estimated reserves of natural gas in the Cypriot EEZ and a potential transfer of natural gas towards Europe whatever its form (via pipeline, liquefied or compressed natural gas) could turn Cyprus into a valuable partner in the EU with a significant contribution to energy security and energy sufficiency.
An article published on Phileleftheros newspaper on 11th of March 2014, by Nasos A. Kyriakides LL.B, DI.M, LL.M, MCI Arb.