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Nord Stream gas sabotage

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Two explosions recorded nearby leaks on Russian natural gas pipelines under the Baltic Sea.

Explosions on the Nord Stream-1 and Nord Stream-2 natural gas pipeline routes were reported by the Swedish National Seismic Network (SNSN). “There is no doubt that these are explosions” said SNSN spokesman Björn Lund.

The Swedish Maritime Administration warned that the ships would not come too close to the area, notifying that there were two leaks on Russian-owned Nord Stream 1 and 2 pipelines. Kremlin spokesman Dmitriy Peskov said damage to the Nord Stream 1 and Nord Stream 2 pipelines may have been caused by sabotage.

“This is very disturbing news. Indeed, we are talking about some destruction in the pipeline, it is not yet clear what kind in the Danish economic zone. Indeed, pressure has dropped significantly” Peskov reported.

Former Polish Defence Minister thanks U.S.

As allegations of sabotage related to the leak were discussed, Former Polish foreign minister Radek Sikorski shared images of the explosion and thanked the U.S. on his Twitter account.

https://twitter.com/radeksikorski/status/1574800653724966915

Russian Foreign Ministry Spokeswoman Maria Zakharova questioned if Sikorski’s tweet were official confirmation of the attack and constituted an “official statement that this was a terrorist attack.”

Zakharova also questioned whether the U.S. was acting on the threat, recalling U.S. President Joe Biden’s promise to end the Nord Stream in February. “If Russia invades Ukraine there will be no longer Nord Stream 2. We will bring end to it” Mr. Biden told the press in early February.

Federal Security Service of the Russian Federation (FSB) Investigation Department announced it launched investigation into the allegations.

In addition to Russia, the Swedish Security Service (SAPO) said it launched a probe into the leaks.

Speaking on the issue, U.S. Secretary of State Antony Blinken stressed that the U.S. is working to ensure Europe’s both short-term basis and long-term basis energy security, arguing that the leaks will not have a significant impact on Europe’s energy resilience.

“There are initial reports indicating that this may be the result of an attack or some kind of sabotage, but these are initial reports, and we haven’t confirmed that yet. But if it is confirmed, that’s clearly in no one’s interest” said Blinken.

The sabotage benefits US

Thanks to the Nord Stream-1 and Nord Stream-2 pipelines built to transport gas from Russia to Europe and primarily to Germany, Russia could bypass Poland and Ukraine and transport its gas directly to Western Europe.

Natural gas transport, which has been 55 billion cubic meters per year so far, was expected to double its capacity to 110 billion cubic meters with the launch of Nord Stream 2.

Until the war, about 40-50 percent of the Russian gas that reached Europe passed through Ukraine. With the launch of Nord Stream 2 project, Ukraine would be left out of the line and would cease to be a transit country. The change in this situation means a huge economic loss of about $2 billion for Ukraine.

On the other hand, Poland, one of the close allies of the United States, was one of the countries that strongly opposed Nord Stream 2. Warsaw, which aims to be an actor in gas transport, was objecting to the project, expressing concern that Russia would increase its leverage over Europe.

Affordable Russian gas was presented as an important priority for Germany, so that gas prices in Europe would fall with the Nord Stream 2 project. However, the U.S. wants to sell its own gas to Europe. But the liquid gas that the U.S. insists on selling to Germany and other European countries is about 20 per cent more expensive than Russian gas.

When the Ukrainian crisis started, Germany stopped the gas supply from these lines also with the pressure of the U.S. With these recent sabotages, it is noted that the gas exchange of Russia and Europe has become more arduous.

RUSSIA

Gazprom shares at lowest since 2017

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Shares in Russian energy giant Gazprom have fallen to their lowest level since the autumn of 2017.

According to transaction data from the Moscow Stock Exchange, Gazprom shares fell 3.97 per cent to 117.9 rubles. The company’s shares last traded below this level on 6 September 2017.

In total, since the beginning of the year, Gazprom’s quotations on the Moscow Stock Exchange have fallen by more than 25 per cent.

In May, Gazprom’s Board of Directors recommended to the Annual General Meeting not to declare or pay dividends based on the company’s 2023 results.

Optimistic expectations about the signing of the contract for the Power of Siberia-2 pipeline project, which will increase natural gas supplies to China, at the St Petersburg International Economic Forum (SPIEF) last week also failed to materialise.

The company’s natural gas production is also at the lowest level in its history

On the other hand, Gazprom continues to cut production. In its annual report published on Monday, the company reported that natural gas production at the end of 2023 was 359 billion cubic metres.

The report said that 13 per cent (53.9 bcm) of production was lost compared to 2022 and 30 per cent (156 bcm) compared to 2021.

Last year’s result was the company’s worst in the 34 years since it was transformed from the USSR’s Ministry of Natural Gas Industry into Gazprom.

By cutting off gas to most of its European customers, Gazprom lost a market it had been associated with for more than half a century.

Last year it sold only 69 bcm of gas to countries outside the Commonwealth of Independent States (CIS), the lowest volume since 1985.

Deliveries to Europe fell to 28 bcm, a level last seen in the second half of the 1970s.

Gazprom ended the year with a net loss under International Financial Reporting Standards (IFRS) for the first time since the late 1990s, and the size of the loss, 629 billion roubles, was a record in the company’s history.

Moscow continues to negotiate with Beijing over the construction of the Siberian Power-2 pipeline, which is expected to increase China’s gas purchases fivefold.

But Beijing has been slow to act, expecting Russia to offer new discounts on gas, which is already 46 per cent cheaper for Chinese buyers than for European countries and Turkey.

According to Financial Times (FT) sources familiar with the talks, Chinese President Xi Jinping has asked his counterpart Vladimir Putin to cut the price of gas to the local level. He also agreed to buy only a small part of the 50 bcm of Siberia’s Power-2 capacity.

According to the newspaper, negotiations on the project have stalled and Russian investment banks have excluded the Chinese contract from Gazprom’s future valuations in their special reports.

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Russian deputy defence minister Ivanov arrested on bribery charges

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The Russian Investigative Committee has reported that Deputy Defence Minister Timur Ivanov has been detained on suspicion of taking bribes.

“Russian Deputy Defence Minister Timur Vladimirovich Ivanov has been detained on suspicion of committing a crime under Article 290, paragraph 6 (bribery) of the Russian Criminal Code,” the committee said in a written statement.

Committee spokeswoman Svetlana Petrenko said the necessary investigation into the incident was under way.

A law enforcement source told the Interfax agency that Ivanov would soon be referred to court for arrest.

Meanwhile, Kremlin spokesman Dmitry Peskov said: ‘Russian President Vladimir Putin has been informed that Deputy Defence Minister Timur Ivanov has been detained. Defence Minister Sergei Shoigu was also informed earlier,” Peskov said.

The relevant article of the Criminal Code contains a charge of ‘large-scale bribery’. The charge covers bribery offences involving more than 1 million roubles.

Such offences carry a maximum prison sentence of 15 years or a fine of up to seventy times the amount of the bribe.

According to the Defence Ministry’s website, Ivanov, 49, graduated from Lomonosov Moscow State University in 1997.

Between 1999 and 2012, he worked in the country’s fuel and energy companies and then in the government of the Moscow region.

In May 2016, he was appointed deputy defence minister of Russia by presidential decree.

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One of the Crocus attackers was trained by ISIS militants in Turkey, Sputnik reports

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Shamsidin Feriduni, one of the perpetrators of the attack on the Crocus City Hall concert hall in Moscow, was linked to Tajik extremist organisations in Turkey, the Tajikistan service of Russian state broadcaster Sputnik reported.

According to the agency’s source, Feriduni trained in Istanbul to carry out the attack, which killed more than a hundred people.

The source said that Feriduni travelled to Istanbul earlier this year and then “began to show signs of extremism in conversations with family and friends”.

According to the source, during this trip he was trained by “mentors” who had fought for ISIS in Afghanistan and Syria.

On the other hand, the source noted that recent operations against ISIS suspects in Turkey were organised thanks to information provided by Feriduni during interrogations.

The Turkish Interior Ministry reported on 31 March that 51 suspects had been detained in operations carried out over four days in 21 provinces.

According to the source, Shamsidin Feriduni was sentenced to six years in prison for sexually assaulting a 12-year-old girl when he was 16.

After his release in 2020, Feriduni travelled to Moscow, worked as a porter and construction worker, and returned to Tajikistan two years ago.

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