Amonolithic, Putin-led Kremlin using the “energy weapon” to browbeat neighbouring Ukraine and beyond and threaten the rest of Europe with natural gas shortages: the image has become commonplace during the “gas spats” of the past few years. Yet those spats have a longer history than is generally appreciated – they began in 1992 – and, what is more, Vladimir Putin and Gazprom cannot win a prolonged gas war, and they know it.
The Soviet gas industry was born in Ukraine in the 1930s and the infrastructure was built from there. Ukraine remained a central part of the gas pipeline network even as the focus of activity moved to western Siberia. Carving up the Soviet Union along along the borders of its former republics made for an often unworkable allocation of physical assets. Vital assets for Gazprom, the Russian gas monopoly, are located in Ukraine and thus no longer under its direct control: the pipelines are an obvious item, but, just as significantly, Ukraine controls most of the storage capacity of the Russian export system. On the other hand, Ukraine, a heavy industry country, has mostly depleted its gas reserves, making it dependent on gas from Siberia.
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