Despatch from Moscow | International

Putin’s double bet — train to Crimea and gas to Ukraine

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Russia has inked a gas deal with Ukraine, while deepening its influence in the annexed Crimea

Russian President Vladimir Putin began last week with a train ride on a new rail bridge over the Kerch Strait that separates the Crimean peninsula from Russia’s mainland, marking yet another milestone in Moscow’s ongoing conflict with its closest neighbour Ukraine.

The beginning of a regular road service in May and the rail service now are important achievements for Mr. Putin, whose approval ratings have been on a steady decline.

Travelling to Crimea, a popular resort destination for many Russians since the Soviet times, was quite painful since Russia seized the peninsula from Ukraine, or “reunited” with it as Moscow prefers to call, in 2014.

Crimea is connected only to the mainland Ukraine, and getting there meant either flying or travelling by road or rail via Ukrainian territories. This all had stopped in 2014 and Russians had to use ferries to get to the peninsula.

Having rail and road bridges over the Kerch Strait will allow thousands of Russians to travel to Crimea for vacation by car or by train, like in the “old times”.

The company operating the trains to Crimea said more than 57,000 tickets were sold during the first one month of sales. By June, when the summer vacation starts, the tickets are expected to be in deficit.

The 19-km bridge was built by a company owned by Mr. Putin’s close ally Arkady Rotenberg in just two years at a cost of $3.7 billion, with the entire funding coming from the federal budget.

Russia’s annexation of Crimea had triggered widespread condemnations, especially from Ukraine and the Western countries who called the move illegal.

European countries and the U.S. have imposed sanctions on Russia after the Ukraine conflict broke out.

As Mr. Putin rode in the cabin of the first passenger train from Crimea to Russia’s mainland last week, the West got yet another chance to condemn his policies towards Ukraine. But this time, the condemning voice was a bit quieter. And not without a reason.

Gas transit deal

A few days before Mr. Putin’s train ride, Moscow and Kiev reached one of the most awaited deals of the year — on the transit of Russian gas to Europe via Ukraine. As the current gas transit agreement is set to expire at the end of the year, a new deal was Russia’s only chance to continue supplying gas to its European buyers and for Europe to keep getting Russian gas. The deal was reached after 15 hours of tough negotiations. Both sides have made compromises.

That Russia’s energy giant Gazprom agreed to pay the $3 billion arbitration bill to Ukraine’s Naftogaz as one of the conditions of the deal confirms that Russia had run out of options. The U.S. sanctions on Russia’s Nord Stream 2 pipeline project that will allow it to transit natural gas to Europe via the Baltic Sea and Germany, signed into law by President Donald Trump at the same time when Russian and Ukraine officials were holding talks, has probably become the last straw.

According to S&P Global Platts analysis, the U.S. sanctions will lead to delays in finishing the Nord Stream 2 pipeline that Russia was aiming to complete by the end of 2019. It’s now expected to be finished in the fourth quarter of 2020. Once fully operational, the pipelines will allow Russia to bypass Ukraine as a transit country.

Naftogaz executive Yuriy Vitrenko said in a Facebook post that the deal was a “difficult compromise” as Russia was looking for a short-term agreement and Ukraine for a 10-year-long one. Finally, they met halfway: the deal was signed for five years. Same on the transit volumes: 65 billion cubic metres in the first year, and 40 billion the next year.

Experts believe the gas deal could have a positive impact on the five-year-long conflict, which claimed more than 13,000 lives. The meeting of Putin and Ukrainian President Volodymyr Zelensky earlier this month in Paris was another sign of a modest progress the two countries are making, even though it did not result in any significant outcome.

So Mr. Putin has shown readiness to compromise on the gas deal, while at the same time deepening Russia’s influence in Crimea through the road and rail links. The trains arriving in Crimea from Russia regularly via the new bridge will now put the progress achieved to test. Earlier this month, Ukraine launched a criminal probe after the first train from St. Petersburg arrived in Crimea, arguing that the passengers had illegally crossed the Ukrainian border.

The question is how Mr. Putin is going to balance engagement and expansion.

Ksenia Kondratieva is a journalist based in Moscow

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Printable version | Jan 21, 2020 5:21:02 AM | https://www.thehindu.com/news/international/putins-double-bet-train-to-crimea-and-gas-to-ukraine/article30420903.ece

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