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World

Ukraine to halt key Russian gas transit to Europe, blames Moscow

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Gas pipelines are pictured at the Atamanskaya compressor station, facility of Gazprom’s Power Of Siberia project outside the far eastern town of Svobodny, in Amur region, Russia November 29, 2019. REUTERS/Maxim Shemetov.

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KYIV/LONDON, May 10 (Reuters) – Ukraine said on Tuesday it would suspend the flow of gas through a transit point which it said delivers almost a third of the fuel piped from Russia to Europe through Ukraine, blaming Moscow for the move and saying it would move the flows elsewhere.

Ukraine has remained a major transit route for Russian gas to Europe even after Moscow’s invasion.

GTSOU, which operates Ukraine’s gas system, said it would stop shipments via the Sokhranivka route from Wednesday, declaring “force majeure”, a clause invoked when a business is hit by something beyond its control.

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But Gazprom (GAZP.MM), which has a monopoly on Russian gas exports by pipeline, said it was “technologically impossible” to shift all volumes to the Sudzha interconnection point further west, as GTSOU proposed.

GTSOU CEO Sergiy Makogon told Reuters that Russian occupying forces had started taking gas transiting through Ukraine and sending it to two Russia-backed separatist regions in the country’s east. He did not cite evidence.

The company said it could not operate at the Novopskov gas compressor station due to “the interference of the occupying forces in technical processes”, adding it could temporarily shift the affected flow to the Sudzha physical interconnection point located in territory controlled by Ukraine.

Ukraine’s suspension of Russian natural gas flows through the Sokhranivka route should not have an impact on the domestic Ukrainian market, state energy firm Naftogaz head Yuriy Vitrenko told Reuters.

The state gas company in Moldova, a small nation on Ukraine’s western border, said it had not received any notice from GTSOU or Gazprom that supplies would be interrupted.

The Novopskov compressor station in the Luhansk region of eastern Ukraine has been occupied by Russian forces and separatist fighters since soon after Moscow began what it describes as a “special military operation” in February. read more

It is the first compressor in the Ukraine gas transit system in the Luhansk region, the transit route for around 32.6 million cubic metres of gas a day, or a third of the Russian gas which is piped to Europe through Ukraine, GTSOU said.

GTSOU said that in order to fulfil its “transit obligations to European partners in full” it would “temporarily transfer unavailable capacity” to the Sudzha interconnection point.

Gazprom said it had received notification from Ukraine that the country would stop the transit of gas to Europe via the Sokhranivka interconnector from 0700 local time on Wednesday.

The Russian company said it saw no proof of force majeure or obstacles to continuing as before. Gazprom added that it was meeting all obligations to buyers of gas in Europe.

The United States has urged countries to lessen their dependence on Russian energy and has banned Russian oil and other energy imports in retaliation for the invasion of Ukraine.

U.S. State Department spokesperson Ned Price said Tuesday’s announcement does not change the timeline to lessen global dependence on Russian oil “as soon as possible.”

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Reporting by Susanna Twidale and Pavel Polityuk; additional reporting by Nina Chestney in London, Daphne Psaledakis in Washington and and David Ljunggren in Ottawa;
Editing by Alexander Smith, Cynthia Osterman and Rosalba O’Brien

Our Standards: The Thomson Reuters Trust Principles.

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Sports

Chelsea owner Abramovich and Rosneft boss Sechin hit by UK sanctions

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  • UK sanctions seven more oligarchs it links to Kremlin
  • Group includes Chelsea owner Abramovich
  • Chelsea sale put on hold, UK might sell club
  • Trading suspended in Evraz shares

LONDON, March 10 (Reuters) – Britain imposed sanctions on Chelsea soccer club owner Roman Abramovich and Igor Sechin, the chief executive of Russian oil giant Rosneft, hitting them with asset freezes and travel bans because of their links to Russian President Vladimir Putin.

The two billionaires plus Oleg Deripaska and four other Russian oligarchs are the most high-profile businessmen to be added to the British sanctions list since Russia’s invasion of Ukraine. The move follows criticism that Britain has been acting too slowly.

The action puts on ice Abramovich’s plans to sell the Premier League club, effectively placing the current European champions under government control. The team can carry on playing but the government said it was open to selling the club so long as Abramovich himself did not benefit. read more

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“There can be no safe havens for those who have supported Putin’s vicious assault on Ukraine,” Prime Minister Boris Johnson said.

“We will be ruthless in pursuing those who enable the killing of civilians, destruction of hospitals and illegal occupation of sovereign allies.”

There had been loud calls from British lawmakers for action to be taken against Abramovich and other Russian oligarchs, with criticism that Johnson’s government was not moving fast enough compared to the European Union and the United States.

Sechin, who Britain described as Putin’s right-hand man, was already on the U.S. and EU sanctions lists and last week French authorities seized his yacht. read more

Since the invasion of Ukraine, which Moscow describes as a “special military operation”, Britain has imposed sanctions on about 20 Russian-linked figures. The EU announced new sanctions on Wednesday against 14 more oligarchs, meaning its restrictions apply to 862 people and 53 entities. read more

15 BILLION POUNDS

The others added to the British list were Deripaska, who has stakes in En+ Group, Dmitri Lebedev, chairman of Bank Rossiya, Alexei Miller, the chief executive of energy company Gazprom, and Nikolai Tokarev, the president of the Russia state-owned pipeline company Transneft.

In total Britain said the seven figures, who with the exception of Abramovich had previously been sanctioned by the United States or the EU, had a collective net worth of 15 billion pounds. ($19.74 billion).

Thursday’s action means Abramovich is banned from carrying out transactions with any British individuals and businesses, and cannot enter or stay in Britain. His spokeswoman declined comment.

The 55-year-old, who has Israeli and Portuguese citizenship, became one of Russia’s most powerful businessmen by earning fabulous fortunes after the 1991 break-up of the Soviet Union. Forbes has put his net worth at $13.3 billion.

He bought Chelsea in 2003 for a reported 140 million pounds and his investment contributed hugely to the most successful era in the team’s history as they won five Premier League titles, five FA Cups and the Champions League twice.

They beat Brazilian side Palmeiras in February to become FIFA Club World Cup champions for the first time, having defeated fellow English side Manchester City to become European champions last season.

Last week, Abramovich announced he would sell Chelsea and donate money from the sale to help victims of the war in Ukraine. Johnson’s spokesman said the government was open to selling the club but it would require another licence. read more

A shop selling the merchandise of Chelsea Football Club is seen closed after Britain imposed sanctions on its Russian owner, Roman Abramovich, in London, Britain, March 10, 2022. REUTERS/Hannah Mckay

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“If the club is sold, Abramovich will not benefit,” sports minister Nadine Dorries told reporters. read more

The government has issued a special licence to allow Chelsea to play fixtures and pay staff, but will limit the sale of tickets and merchandise. read more

Anita Clifford, a lawyer who specialises in asset freezing and sanctions matters, said the measures temporarily deprived Abramovich of his assets but Chelsea could be sold with his and the government’s agreement. The money could potentially go to help Ukrainian war victims.

“The proceeds…would be frozen too and would not simply flow to the designated person unless there was a licence or agreement in place to either cover this, or cover the proceeds going to a nominated beneficiary which both parties considered appropriate,” she told Reuters.

The entry on the British sanctions list described Abramovich, who Britain said was worth 9 billion pounds, as “a prominent Russian businessman and pro-Kremlin oligarch who had enjoyed “a close relationship for decades” with Putin.

This association had brought Abramovich financial or material benefit from either Putin directly or the Russian government, it said.

It said he was “involved in destabilising Ukraine” and undermining its sovereignty and independence via the London-listed Russian steelmaker Evraz (EVRE.L) in which he is the biggest shareholder.

Britain’s financial watchdog suspended trading of shares in Evraz, which plummeted 16% after the sanctions were announced.

Evraz has been involved in providing financial services, or funds, goods or technology that could damage Ukraine’s independence including providing steel that might be used to make Russian tanks, the British treasury said.

Abramovich could apply to the foreign office for an internal review of the asset freeze, or apply to the High Court in London for a review of the decision, a process that could take 18 months or longer, Clifford said.

‘LONDONGRAD’

London has long been a top destination for Russian money, with wealthy Russians using it as a luxury playground and educating their children at fee-paying schools. It has earned the nickname Londongrad.

Johnson’s critics, who point out his Conservative Party has close ties to Russian donors who have donated about 1.9 million pounds since he came to power, say the government has been slow to impose sanctions and asset freezes on the oligarchs and those close to Putin’s administration.

Opposition lawmakers said the news of the sanctions was welcome but they had taken far too long.

“This is the right decision. But it should not have taken the government weeks,” said David Lammy, foreign affairs spokesman for the Labour Party.

“Too few oligarchs linked to Putin’s rogue regime have so far faced sanctions from the UK government. We are lagging far behind allies in the EU and the US.”

($1 = 0.7599 pounds)

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Reporting by Kate Holton, Alistair Smout, and Paul Sandle; writing by Michael Holden; editing by William James, Frank Jack Daniel and Angus MacSwan

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World

Britain warns Russia of sanctions on oligarchs if Ukraine is invaded

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  • Britain warns Russia of possible sanctions over Ukraine
  • Russia has massed troops near Ukraine
  • UK already has sanctions on some Russian people, entities
  • Kremlin says sanctions will backfire and hurt UK companies
  • Johnson will tell Putin to “step back from the brink”

LONDON/MOSCOW, Jan 31 (Reuters) – Britain urged Russian President Vladimir Putin on Monday to “step back from the brink” over Ukraine, warning that any incursion would trigger sanctions against companies and people with close links to the Kremlin.

Kremlin spokesman Dmitry Peskov said the threat of such measures, echoing moves outlined by a senior U.S. official following a Russian troop buildup near Ukraine, would amount to an attack on Russian businesses. read more

Kremlin spokesman Dmitry Peskov called the British warning “very disturbing”, and said such statements undermined Britain’s investment attractiveness and would backfire by hurting British companies.

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“It’s not often you see or hear such direct threats to attack business,” Peskov said. “An attack by a given country on Russian business implies retaliatory measures, and these measures will be formulated based on our interests if necessary.”

Since the fall of the Soviet Union in 1991, London has become the pre-eminent global centre for a vast outflow of money from former Soviet republics.

Opponents of Putin have repeatedly called on the West to get tough on Russian money, though oligarchs and Russian officials continue to flaunt their wealth at Europe’s most luxurious destinations.

British Prime Minister Boris Johnson is due to travel to Ukraine and will also speak to Putin by telephone.

“What I will say to President Putin, as I’ve said before, is that I think we really all need to step back from the brink, and I think Russia needs to step back from the brink,” Johnson told reporters.

LIST OF RUSSIAN ELITES

The United States, the European Union and Britain have warned Putin of tough sanctions if Russia attacks Ukraine after gathering tens of thousands of troops near the border. read more

A senior Biden administration official said Washington and its allies have prepared a list of Russian elites in or near Putin’s inner circle for hitting with economic sanctions.

“The individuals we have identified are in or near the inner circles of the Kremlin and play a role in government decision making or are at a minimum complicit in the Kremlin’s destabilizing behavior,” the official said in Washington, speaking on condition of anonymity.

The United States has developed specific sanctions packages for both Russian elites who meet the criteria and their family members, and these efforts are being pursued in coordination with U.S. allies and partners, the official said.

Russia denies planning to attack Ukraine and is demanding security guarantees including a promise by NATO never to let Kyiv join the alliance.

The British government will introduce new legislation this week to broaden the scope of sanctions it can apply to Russia to try to deter aggression towards Ukraine, Foreign Secretary Liz Truss said on Sunday. read more

She said London should be able to target “any company of interest to the Kremlin and the regime in Russia” and that “there would be nowhere to hide for Putin’s oligarchs”.

Visiting Hungary, British Defence Secretary Ben Wallace said it was important to defuse the crisis as a war would lead to greater instability, higher fuel prices and migrant flows.

Wallace expressed support for a planned trip to Russia on Tuesday by Hungarian Prime Minister Viktor Orban for talks with Putin, adding: “We need to de-escalate this and stand up for the right for sovereignty of Ukraine.” read more

Britain has imposed sanctions on about 180 people and 48 entities since Russia annexed Crimea form Ukraine in 2014. https://www.gov.uk/government/publications/the-uk-sanctions-list

On the sanctions list are six people Britain says are close to Putin: businessmen Yuri Kovalchuk, Arkady Rotenberg and Nikolai Shamalov, former KGB officer Sergei Chemezov, Russian Security Council Secretary Nikolai Patrushev and Federal Security Service (FSB) chief Alexander Bortnikov.

The sanctions allow Britain to freeze individual assets and ban individual from entering the United Kingdom.

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Reporting by Guy Faulconbridge, William James and Dmitry Antonov; editing by Michael Holden and Timothy Heritage

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World

Shipowners make payoffs to free vessels held by Indonesian navy near Singapore- sources

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A bird’s-eye view of ships along the coast in Singapore July 9, 2017. REUTERS/Jorge Silva/File Photo

  • Indonesian navy detains ships waiting near Singapore port
  • Shipowner sources say costs $300,000 to have them released
  • Navy denies receiving or asking for money
  • Arrests come as pandemic delays cause port congestion

SINGAPORE, Nov 14 (Reuters) – More than a dozen shipowners have made payments of about $300,000 apiece to release vessels detained by the Indonesian navy, which said they were anchored illegally in Indonesian waters near Singapore, according to sources with direct knowledge of the matter.

The dozen sources include shipowners, crew and maritime security sources all involved in the detentions and payments, which they say were either made in cash to naval officers or via bank transfer to intermediaries who told them they represented the Indonesian navy.

Reuters was not able to independently confirm that payments were made to naval officers or establish who the final recipients of the payments were.

The detentions and payments were first reported by Lloyd’s List Intelligence, an industry website.

Rear Admiral Arsyad Abdullah, the Indonesian naval fleet commander for the region, said in a written response to Reuters’ questions that no payments were made to the navy and also that it did not employ any intermediaries in legal cases.

“It is not true that the Indonesian navy received or asked for payment to release the ships,” Abdullah said.

He said there had been an increasing number of detentions of ships in the past three months for anchoring without permission in Indonesian waters, deviating from the sailing route or stopping mid-course for an unreasonable amount of time. All the detentions were in accordance with Indonesian law, Abdullah said.

The Singapore Strait, one of the busiest waterways in the world, is crowded with vessels waiting for days or weeks to dock at Singapore, a regional shipping hub where the COVID-19 pandemic has led to long delays.

Singapore’s waterways are among the busiest in the world

Ships have for years anchored in waters to the east of the Strait while they wait to port, believing they are in international waters and therefore not responsible for any port fees, two maritime analysts and two shipowners said.

The Indonesian navy says this area comes within its territorial waters and it intends to crack down harder on vessels anchoring there without a licence.

A spokesperson for the Maritime and Port Authority of Singapore, a government agency, declined to comment.

CRAMPED DETENTION

Around 30 ships, including tankers, bulk carriers and a pipeline layer, have been detained by the Indonesian navy in the last three months and the majority have since been released after making payments of $250,000 to $300,000, according to two shipowners and two maritime security sources involved.

Making these payments is cheaper than potentially losing out on revenue from ships carrying valuable cargo, like oil or grain, if they are tied up for months while a case is heard in Indonesian court, two shipowners said.

Two crew members of detained ships said armed navy sailors approached their vessels on warships, boarded them and escorted the ships to naval bases on Batam or Bintan, Indonesian islands south of Singapore, across the Strait.

The ship captains and often crew members were detained in cramped, sweltering rooms, sometimes for weeks, until shipowners organised cash to be delivered or a bank transfer was made to an intermediary of the navy, two detained crew members said.

Abdullah, the Indonesian naval officer, said ship crew members were not detained.

“During the legal process, all crew of the ships were on board their ships, except for questioning at the naval base. After the questioning, they were sent back to the ships,” he said.

Path of vessels that were detained near Singapore and then released by Indonesian authorities

Stephen Askins, a London-based maritime lawyer who has advised owners whose vessels have been detained in Indonesia, said the navy was entitled to protect its waters but if a ship was detained, then some form of prosecution should follow.

“In a situation where the Indonesian navy seems to be detaining vessels with an intention to extort money it is difficult to see how such a detention could be lawful,” Askins told Reuters in an email. He declined to give details about his clients.

Marine Lieutenant Colonel La Ode Muhamad Holib, an Indonesian navy spokesperson, told Reuters in a written response to questions that some vessels detained in the last three months had been released without charge due to insufficient evidence.

Five ship captains were being prosecuted and two others had been given short prison sentences and fined 100 million rupiah ($7,000) and 25 million rupiah, respectively, Holib said, declining to elaborate further on the specific cases.

($1 = 14,240 rupiah)

Reporting by Joe Brock in Singapore; additional reporting by David Lewis in Nairobi; graphics by Gavin Maguire; Editing by Raju Gopalakrishnan

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Business

U.S. demand for oil surges, depleting tanks in Oklahoma

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Crude oil storage tanks are seen in an aerial photograph at the Cushing oil hub in Cushing, Oklahoma, U.S. April 21, 2020. REUTERS/Drone Base

NEW YORK, Oct 27 (Reuters) – Crude oil tanks at the Cushing, Oklahoma storage and delivery hub for U.S. crude futures are more depleted than they have been in the last three years, and prices of further dated oil contracts suggest they will stay lower for months.

U.S. demand for crude among refiners making gasoline and diesel has surged as the economy has recovered from the worst of the pandemic. Demand across the globe means other countries have looked to the United States for crude barrels, also boosting draws out of Cushing.

Analysts expect the draw on inventories to continue in the short-term, which could further boost U.S. crude prices that have already climbed by about 25% in the last two months. The discount on U.S. crude futures to the international Brent benchmark should stay narrow.

“Storage at Cushing alone has the potential to really rally the market to the moon,” said Bob Yawger, director of energy futures at Mizuho.

Cushing stockpiles have dropped to 27.3 million barrels, the lowest since October 2018, the Energy Information Administration said on Wednesday, or about half of where inventories were at this time a year ago. [EIA/S]

Inventories have fallen because of a ramp-up in U.S. demand, which has encouraged domestic refiners to keep crude at home to provide fuel such as gasoline and distillates to U.S. consumers, said Reid I’Anson, senior commodity analyst at Kpler.

In addition, U.S. production has been slow to recover from declines seen in 2020. At the end of 2019, the nation was producing roughly 13 million barrels of oil per day (bpd), but in recent weeks has been less than 11.5 million bpd. At the same time, product supplied by refineries – a proxy for demand – is about just 1% below pre-pandemic peaks.

Crude inventories at the Cushing, Oklahoma, storage hub fell 31.2 million barrels in the most recent week, the lowest since October 2018.

As a result, the spread between U.S. crude and Brent, has collapsed. The spread narrowed to roughly $1.09 a barrel this week from $4.47 earlier this month, which had been about the widest spread since May 2020.

In an additional sign of high short-term demand for U.S. crude, the premium for U.S. crude delivered this December versus December 2022
reached a high this week of $12.48 per barrel, most since at least 2014, according to Refinitiv Eikon data.

In the next three months, Rystad Energy expects refinery runs in the United States to increase by 500,000 to 600,000 barrels per day. This would outpace production gains of 300,000-400,000 bpd, and keep the spread between the two benchmarks narrow.

“Only if OPEC (the Organization of the Petroleum Exporting Countries) intervenes with more supply of crude or if COVID rears its ugly head again, curbing demand, this high volatility will come off,” said Mukesh Sahdev, senior vice president and head of downstream at Rystad Energy.

The U.S. crude discount to Brent has reached its narrowest recently since September 2020. Meanwhile, the premium for U.S. crude delivered this December versus December 2022 reached the most since at least 2014.

Reporting by Stephanie Kelly; Editing by David Gregorio and Marguerita Choy

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Business

EXCLUSIVE China looks to lock in U.S. LNG as energy crunch raises concerns

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SINGAPORE/NEW YORK, Oct 15 (Reuters) – Major Chinese energy companies are in advanced talks with U.S. exporters to secure long-term liquefied natural gas (LNG)supplies, as soaring gas prices and domestic power shortages heighten concerns about the country’s fuel security, several sources said.

At least five Chinese firms, including state major Sinopec Corp and China National Offshore Oil Company (CNOOC) and local government-backed energy distributors like Zhejiang Energy, are in discussions with U.S. exporters, mainly Cheniere Energy (LNG.A) and Venture Global, the sources told Reuters.

The discussions could lead to deals worth tens of billions of dollars that would mark a surge in China’s LNG imports from the United States in coming years. At the height of a Sino-U.S. trade war in 2019, gas trade briefly came to a standstill. LNG export facilities can take years to build, and there are several projects in North America in the works that are not expected to start exporting until the middle of the decade.

Talks with U.S. suppliers began early this year but speeded up in recent months amid one of the biggest power-generating, heating fuel crunch in decades. Natural gas prices in Asia have jumped more than fivefold this year, sparking fears of power shortages in the winter.

“Companies faced a supply gap (for winter) and surging prices. Talks really picked up since August when spot prices touched $15/mmbtu”, said a Beijing-based senior industry source briefed on the talks.

Another Beijing-based source said: “After experiencing the recent massive market volatility, some buyers were regretting that they didn’t sign enough long-term supplies.”

Imports for winter of 2021 are capped as soaring global prices hurt demand

Sources expected fresh deals to be announced over the coming few months, after privately controlled ENN Natural Gas Co, (600803.SS), headed by the ex-LNG chief of China’s largest buyer, CNOOC, announced a 13-year deal with Cheniere on Monday. read more

It was the first major U.S.-China LNG deal since 2018.

The new purchases will also cement China’s position as the world’s top LNG buyer, taking over from Japan this year.

“As state-owned enterprises, companies are all under pressure to keep security of supply and the recent price trend has deeply changed the image of long-term supplies in the mind of leadership,” said the first Beijing-based trader.

“People may have taken the spot (market) as the key in the past, but are now realizing that long-term cargoes are the backbone.”

CHEAPER U.S. GAS

The sources declined to be named as the negotiations are private.

Sinopec declined comment. CNOOC and Zhejiang Energy did not immediately respond to requests for comment.

Venture Global declined comment. Cheniere did not immediately respond to a request for comment.

“We expect more deals to be signed before year-end. It’s primarily driven by the global energy crunch and prices we’re seeing now… U.S. supplies now stand out as attractive,” said a third Beijing source briefed on the talks.

U.S. cargoes used to be expensive versus oil-linked supplies from Qatar and Australia for example, but are cheaper now.

A deal at $2.50 + 115% of Henry Hub futures , similar to ENN’s deal according to traders, would be roughly about $9-$10 per million British thermal units (mmBtu) on a delivered basis into Northeast Asia. This includes an average shipping cost of $2 per mmBtu for the U.S.-China route.

Jason Feer, global head of business intelligence with consultancy Poten & Partners said Chinese companies are heavily exposed to Brent-related pricing for LNG and the U.S. purchases give some diversity to the pricing.

Asian spot gas prices are currently trading at above $37 per mmBtu after reaching a record high of over $56 earlier this month. read more

Traders expect prices to go higher in winter when demand typically surges.

Chinese buyers are scouting for both near-term shipments to cover demand this winter and long-term imports as demand for gas, seen by Beijing a key bridge fuel before reaching its 2060 carbon-neutral goal, is set for steady growth through 2035.

China’s H1 2021 imports surged 28% on yr in counter-seasonal spike, but H2 imports seen capped by high prices

It’s hard to estimate a total volume of the deals being discussed, sources said, but Sinopec alone could be eyeing 4 million tonnes annually as the company is most exposed to the spot market versus domestic rivals PetroChina and CNOOC, said a third source.

Traders said Sinopec is in final talks with 3 to 4 companies to buy 1 million tonnes a year for 10 years, starting from 2023, and is looking for U.S. volumes as part of the requirement.

Delays in LNG export projects in Canada, in which PetroChina owns a stake, and Mozambique, where both PetroChina and CNOOC have invested, also made U.S. supplies attractive, sources added.

North American LNG exporters have been adding to capacity because of demand in major Asian economies.

Cheniere, the largest exporter out of the United States, said in late September it expects to announce “a number of other transactions” that will support their going forward with the Corpus Stage 3 expansion next year.

Venture Global is building or developing over 50 million tonnes per annum (MTPA) of LNG production capacity in Louisiana, including the 10-MTPA Calcasieu, which is expected to cost around $4.5 billion and start producing LNG in test mode in late 2021. read more

However, some buyers remained cautious.

“There is a lot of hype in the market and nobody knows for sure how long this supply crunch would last. For companies that do not have fresh demand in the next year or two, it’s better to wait,” said a separate Chinese importer.

Reporting by Chen Aizhu, Jessica Jaganathan in Singapore and Scott Disavino in New York; additional reporting by Gary McWilliams in Houston; editing by Raju Gopalakrishnan and Jason Neely

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World

‘Ms Nord Stream 2?’: Germany’s Merkel makes difficult last visit to Poland

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WARSAW, Sept 11 (Reuters) – German Chancellor Angela Merkel’s visit to Poland on Saturday, part of a goodbye tour of Europe for the continent’s longest serving leader, risks being overshadowed by tensions over a gas pipeline and questions over her legacy in central Europe.

Having grown up in East Germany near the Polish border, Merkel, 67, was seen by some observers as a chancellor who could relate to the post-communist states of central Europe.

However, on her farewell visit to the capital of emerging Europe’s largest economy, her determination to complete the Nord Stream 2 gas pipeline to Russia has soured relations.

The pipeline pits Germany, the EU’s biggest economy, against central and eastern European nations, some of them EU members, who say it will increase the bloc’s dependence on Russian gas.

Russia, the cornerstone of the Soviet Union that once dominated central and eastern Europe, is still viewed in much of the region with suspicion.

“Generally she was seen as someone who understood central and eastern Europe,” said Michal Baranowski, head of the German Marshall Fund’s Warsaw office, adding Polish-German relations were at a “tricky moment”.

“I think she’s leaving as Ms Nord Stream 2, from the Polish perspective.”

Relations have been tense under Poland’s ruling nationalists, the PiS.

Polish Deputy Foreign Minister Marcin Przydacz told Polish public radio on Friday he expected Nord Stream 2 would feature in Merkel’s talks with Prime Minister Mateusz Morawiecki, alongside the Polish COVID-19 National Recovery Plan, which has not been approved by Brussels due to concerns over Warsaw’s commitment to the rule of law. read more

CONFLICT

Poland and Hungary are embroiled in a long-running row with Brussels over issues including judicial independence, press freedoms and LGBT rights, a conflict that recently intensified with Brussels taking legal action against Warsaw and Budapest.

“She (Merkel) is worried that the divergences about the judicial question will grow between Eastern Europe and the rest,” said a German government source.

Analysts say that under Merkel’s rule, Germany sought consensus and dialogue with central and eastern European states, pushing Brussels to the fore and avoiding direct conflict.

However, some diplomats say Merkel could have done more against democratic backsliding.

“Merkel doesn’t like revolution. She doesn’t like to rock the boat and she probably thought that she could contain it, and clearly that didn’t work,” said Sophie in’t Veld, a Dutch Liberal member of the European Parliament.

But with anti-German sentiment still strong among many PiS voters, some analysts say Merkel may also have been wary of stirring up old animosities in a country that suffered greatly during World War Two.

PiS politicians have repeatedly called for war reparations from Germany.

With Armin Laschet, the conservatives’ candidate to succeed Merkel, struggling in polls, policymakers across Europe are starting to contemplate what a government led by Finance Minister Olaf Scholz’s Social Democrats would mean.

“It is very important that the next German government backs a more decided EU response to stop further backsliding in Poland, Hungary and other countries,” said Daniela Schwarzer, executive director for Europe and Eurasia at the Open Society Foundation.

Reporting by Alan Charlish, Justyna Pawlak, Anna Koper and Alicja Ptak in Warsaw, Andreas Rinke in Berlin, John Chalmers in Brussels, John Irish in Paris
Editing by Mark Potter

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World

‘Eye of fire’ in Mexican waters snuffed out, says national oil company

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MEXICO CITY, July 2 (Reuters) – A fire on the ocean surface west of Mexico’s Yucatan peninsula early on Friday has been extinguished, state oil company Pemex said, blaming a gas leak from an underwater pipeline for sparking the blaze captured in videos that went viral.

Bright orange flames jumping out of water resembling molten lava was dubbed an “eye of fire” on social media due to the blaze’s circular shape, as it raged a short distance from a Pemex oil platform.

The fire took more than five hours to fully put out, according to Pemex.

The fire began in an underwater pipeline that connects to a platform at Pemex’s flagship Ku Maloob Zaap oil development, the company’s most important, four sources told Reuters earlier.

Ku Maloob Zaap is located just up from the southern rim of the Gulf of Mexico.

Pemex said no injuries were reported, and production from the project was not affected after the gas leak ignited around 5:15 a.m. local time. It was completely extinguished by 10:30 a.m.

The company added it would investigate the cause of the fire.

Pemex, which has a long record of major industrial accidents at its facilities, added it also shut the valves of the 12-inch-diameter pipeline.

Angel Carrizales, head of Mexico’s oil safety regulator ASEA, wrote on Twitter that the incident “did not generate any spill.” He did not explain what was burning on the water’s surface.

Ku Maloob Zaap is Pemex’s biggest crude oil producer, accounting for more than 40% of its nearly 1.7 million barrels of daily output.

“The turbomachinery of Ku Maloob Zaap’s active production facilities were affected by an electrical storm and heavy rains,” according to a Pemex incident report shared by one of Reuters’ sources.

Company workers used nitrogen to control the fire, the report added.

Details from the incident report were not mentioned in Pemex’s brief press statement and the company did not immediately respond to a request for comment.

Reporting by Adriana Barrera and Marianna Parraga; Additional reporting by David Alire Garcia; Writing by Anthony Esposito; Editing by Daina Beth Solomon, Philippa Fletcher and David Gregorio

Our Standards: The Thomson Reuters Trust Principles.

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