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08/02/2007 | Ukraine: Keeping Its Pipelines out of Russia's Reach

Stratfor Staff

The Ukrainian Rada adopted a law Feb. 6 that forever prevents the country's natural gas transport pipelines from falling into foreign hands.

 

The move not only puts the Kremlin on alert that at least in some forms Ukrainian nationalism is alive, well and popular, it also highlights the ongoing oligarchic struggle for Ukraine's assets -- as well as its hearts and minds.

Ukraine's parliament, the Rada, voted by a margin of 430-9 (with 11 members not in attendance) not only to prohibit the sale of the country's natural gas transport system or national energy assets to foreigners, but also to require that any new systems created must be 100 percent owned by the Ukrainian state.

Natural gas-related issues are part and parcel of Ukraine's ongoing West vs. East debate: The western portions of the country often feel estranged from their Russian suppliers and more willing to sign on with the West, while the country's Russofied East instead wants closer political and economic relations with Moscow.

The parliamentary effort -- spearheaded by the charismatic Yulia Timoshenko, leader of an eponymous political bloc -- originated in response to comments by both Ukrainian Prime Minister Viktor Yanukovich and Russian President Vladimir Putin that joint management of the Ukrainian network could lead to greater throughput, something that in theory would help both sides increase their income.

Timoshenko would have none of it. She -- and many other Ukrainian nationalists -- see any Russian involvement in the pipelines as the surrender of one of the few levers Kiev holds over Moscow. So long as more than three-quarters of Russia's natural gas exports to the European Union and Turkey flow through Ukrainian-owned lines, the nationalists argue, Moscow cannot dictate terms to Kiev.

Beyond the issue of maintaining Ukrainian sovereignty, however, the vote highlights two critical issues.

First, even parliamentarians from Yanukovich's own Moscow-friendly Party of Regions voted en masse for the restriction on the sale of the network. Ukraine is home to nearly 20 million Russians who, by and large, identify more with people across the border in Russia than with those across the country in the nationalist powerbase of Lviv; however, those Russians' sense of political loyalty and national pride apparently are such that they want to keep control of their country's most valuable physical asset in non-Russian hands. A Russia that has been working steadily to reassert its influence in Kiev cannot ignore that fact.

Second, there is more at work here than the often-wily Timoshenko simply securing a nationalist victory. Back around the turn of the millennium, when Timoshenko was in government as energy minister, she was hardly a diligent bureaucrat beyond corruption. She made her personal fortune by grabbing for herself the rights to sell imported Russian natural gas to Ukraine's various regional distributors (to the point that the Russians had an outstanding warrant for her arrest even when she became Ukraine's prime minister in 2004). So long as the infrastructure that made her fortune possible remains firmly in state hands -- and now it will -- Timoshenko has preserved the possibility of replicating such income in the future.

After all, Timoshenko is not only a former energy minister, but also a former prime minister -- and she has every intention of scrambling back to the top again.

Stratfor (Estados Unidos)

 


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