Since 2008, Ukraine was playing havoc with the Russian gas transit pipeline that went through her geography. She failed to play fair in meeting debt commitments to Gazprom and often threatened Russia with closure of the pipeline. In the hands of Ukraine gas pipeline was a geoeconomics weapon. Then appeared Putin, a follower of Sun Tzu. Read more….
Mounting debt owed by Ukraine to Gazprom apart, threatening Russia did not sit well in the Kremlin. Ukraine gas pipeline steadily became existential threat. Gazprom wished to teach a lesson and ordered cutting off gas to Europe that was being pumped through this pipeline. It was January 2009, winter time and Central & Northern Europe were freezing in the cold. Emergency appeals from European leaders resulted in change of heart from Russia but with a firm decision. Find alternate supply route. Consequently Nord Stream 1 (NS-1) was planned as twin pipeline system.
“Construction of Line 1 of the twin pipeline system began in April 2010, and was completed in June 2011. Transportation of gas through Line 1 began in mid-November 2011. Construction of Line 2, which runs parallel to Line 1, began in May 2011 and it was completed in April 2012. Gas transport through the second line began in October 2012. Each line has a transport capacity of roughly 27.5 Bcm of natural gas per annum”. (Read)
Ukraine was rattled. She saw her geoeconomics clout trembling beneath the surface. Her business strategy of using pipeline as geoeconomics weapon was unravelling. Then came the knockout punch by Putin. Nord Stream 2 (NS 2) was negotiated between Germany & Russia. The NS 2 is about to be completed by September 2021 and after testing would be fully operational as New Year dawns in 2022. Both Ns 1 & NS 2 combined have total theoretical capacity of 110 Bcm.
On the one hand Putin was generous enough. In an earlier instance he agreed to honour the ruling of Stockholm Arbitration Institute over price dispute of gas between Gazprom & Naftogaz requiring compensation payment of US$ 3 Billion to be paid to the latter. He also agreed to pay part of the loss of transit fee during the years 2022 until 2024 once NS 2 becomes operational. This sum is about US$ 5.4 Billion. All these good measures cannot hide the fact that Putin has successfully attacked Ukraine’s strategy of using gas pipeline as geoeconomics weapon.
Ukraine is now drumming support for labelling Russia as the one who is going to use NS 1 & 2 as a geoeconomics weapon. If we are to go by Ukraine’s assertion then it is abundantly clear that Putin has turned the table. Succinctly put, the original geoeconomics weapon of Ukraine’s gas pipeline has now metamorphosed as Russian NS 1 & 2. From where did Putin get the inspiration? Answer is given below:
Sun Tzu in his book “Art of War” Chapter 3 Item 2 & 3 states the following: “Hence to fight and conquer in all your battles is not supreme excellence; supreme excellence consists in breaking the enemy’s resistance without fighting. Thus the highest form of general ship is to balk the enemy’s plans”.
Put it other way first attack the enemy strategy that will break the enemy without firing a shot!
Cheers!
Muthu
Ashraff Rajulu
Business Strategist
Mobile: + 94 777 265677
E-mail: cosmicgems@gmail.com
Blog: Business Strategist
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