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The geopolitics of Poland’s «3 Seas Initiative»

Poland's initiative to date is a thinly-disguised geopolitical attempt to create a counter to the influence of both Russia to the east and of Germany to her west.

The geopolitics of Poland’s «3 Seas Initiative»

Poland's 3 Seas Initiative to date is a thinly-disguised geopolitical attempt to create a counter to the influence of both Russia to the east and of Germany to her west.

The current 3 Seas Initiative was formally founded in Dubrovnik in August 2016 and includes 12 central and eastern European states as members.
Member countries span the space between the Baltic, the Adria and the Black Seas, hence the name.

In addition to Poland and Croatia, members presently include Estonia, Latvia, Lithuania, the Czech Republic, Slovakia, Austria, Hungary, Bulgaria, Romania, and Slovenia. It's 2nd meeting in Warsaw in July 2017 was attended by the US President Trump, who gave the group his clear imprimatur.

The question is what political or economic notions are driving Poland's 3Seas Initiative? If we look more closely at its initial focus on energy, much becomes clearer.

US Shale LNG

On July 6, 2017 en route to the Hamburg G20 Summit, US President Donald Trump made a high-profile stop in Warsaw to attend the 2nd meeting of the 3 Seas Initiative, a project 1st publicly proposed by Polish President Andrzej Duda.

While the prime actors, Poland and Croatia, insist that the 3 Seas Initiative is not at all geopolitical, but rather a forum to better integrate common infrastructure projects north-south in the new EU states of central Europe, it's clear that the opposite is the case, it's geopolitics.

The real driver of the initiative, Washington, is clearly opposed to the German-Russian undersea Baltic Nord Stream 2 gas pipeline. Poland for her part stands to lose gas transit fees as the present transit routes of Russian gas via Ukraine and Poland would be phased out, but that is not the major driver.

For Germany and for Russia, since the US-initiated February 2014 Kiev coup d'etat broke Ukraine's ties with Russia, Ukraine transit of Russian gas has been a highly explosive and uncertain issue.

A Polish Gas Hub
For their side Poland has dreams of using the 3 Seas Initiative to make Poland into a new gas hub for the EU by importing US LNG.

By contrast, Russia today delivers most of its gas via pipeline to the EU market. The cost of Russian gas as a result of this and other factors is significantly lower. For Poland this seems not to matter. They dream of replacing Ukraine as the gas transit to the EU with gas from Norway and LNG gas from the USA and perhaps gas from Qatar if Washington does not manage to disrupt that via Saudi sanctions.

In late June, 2017 Poland's new LNG terminal on the Baltic Sea at Swinoujscie received the 1st US LNG shipment from the Texas terminal of Cheniere Energy, currently the only US LNG terminal for export of LNG.

During the Trump visit Poland's president made clear he wanted long-term contracts with US LNG suppliers, ultimately to export to other countries of the 3 Seas Initiative in place of Russian gas via Ukraine. In the process, Poland has dreams of replacing Russia also as supplier to Ukraine.

Commenting on the Polish wish, Trump declared that «many more» US LNG shipments will be coming to Poland, but added that the price might rise. «Maybe we get your price up a little bit, but that's ok, tough negotiations,» Trump told his audience in Warsaw. «We are sitting on massive energy, we are now exporters of energy. Whenever you need energy, just give us a call». Tough negotiations, to be sure.

Poland is building a strategy to make it the new energy hub of central Europe to replace Russian gas. This is at the heart of her 3 Seas Initiative project. The new LNG terminal which was built at a cost of $ 1 billion can accept 5 billion cubic meters of gas per year, about one-third Poland's nnual gas consumption. Poland is discussing doubling that.

But that's only the 1st part of what in fact is a NATO strategy to drive Russian gas out of EU markets. The strategy calls for making Poland a natural gas hub for Central Europe by linking Poland with Lithuania, Ukraine, Slovakia and the Czech Republic through interconnectors.

Blocking Nord Stream 2
The Polish 3 Seas Initiative on energy infrastructure for importing US LNG is at one and the same time a strategy against German influence on EU energy markets and against Russia as major energy supplier. It is no wonder, given Poland's gas hub ambitions that the country takes the lead in trying to block the German-Russian Nord Stream 2 under-Baltic gas pipeline.

On November 1, Krzysztof Szczerski, head of the Chancellery of the President of Poland, announced that Poland's government will do everything possible to block Nord Stream 2.

«We must be aware of the Nord Stream 2 issue, of what scale of interests we are facing,» he stated. «We are dealing with the interests of 2 large states (Germany and Russia-w.e.), which will launch significant resources for the implementation of this project. Nord Stream 2 is not a side project, but a foundation to their interests. Simultaneously, it has a deep anti-European character (sic!),» he said.

Blocking Nord Stream 2 is also a high Washington priority. In June, 2017 the US Congress passed and President Trump signed into law severe new anti-Russian sanctions that among other aims explicitly targeted investment in Nord Stream 2.

The latest US economic sanctions against Russia take direct aim at the companies involved in backing the Nord Stream 2 pipeline expansion across the Baltic, independent of Poland transit. If activated by the US President it would impose severe economic sanctions on EU companies involved in energy projects with Russia, such as Nord Stream 2.

The governments of Germany and Austria immediately registered vehement opposition to the latest possible US sanctions for obvious reasons. On June 15 the German and Austrian foreign ministers issued an unusually US-critical joint statement.

They declared in very strong terms, «Europe's energy supply is a matter for Europe, not the USA. We cannot accept … the threat of illegal extraterritorial sanctions against European companies that participate in the development of European energy supply.» Austria boycotted the Trump July 6 appearance before the 3 Seas Initiative as well to signal its disapproval of the US gas talks.

Poland's costly US LNG
On November 21, 2017 Poland's state gas firm PGNiG signed its 1st mid-term deal for LNG deliveries from the US, as part of their plan to cut dependence on Russian supplies. PGNiG said that as part of the deal, signed with Centrica LNG Co. an Anglo-American energy group, it will receive 9 LNG shipments in 2018-2022.

The company has not revealed the volumes and prices agreed under the contract. Market indications are that the Polish government is paying a huge penalty for its Russo-phobia.

Estimates of Russia's Gazprom suggest that Poland must pay for winter 2017-18 in the range of $265-$295/1,000 cubic meters. Russian gas via pipeline is being delivered for an average price of $190/1,000 cu m.

If accurate, it suggests that Poland is paying up to 50% more for its US LNG deliveries. To deliver that US LNG further to other 3 Seas Initiative partner countries implies far higher gas prices in central Europe.

What is developing are new major EU fault lines around the economic lifeline of energy, explicitly of natural gas energy. On the one side is the axis between especially Germany but also Austria, France and other EU states currently tied to major Russian gas supplies. Now emerges clearly the opposed axis of Poland allied with Washington.

Role of Atlantic Council
For Washington Poland's 3 Seas Initiative is a win-win situation. That should come as no surprise when we consider that the Atlanticist NATO think tank, Atlantic Council, is playing a shaping role behind formation of the Poland 3 Seas Initiative.

The naming of former Exxon Mobil CEO Rex Tillerson as Secretary of State was no accident. It is part of a longer-term Washington strategy to make the US, particularly with its recent exploitation of unconventional shale gas and shale oil, to become the dominant global energy power.

US actions in Syria and with Saudi Arabia against Iran and Qatar fit into that strategy. Elimination or sharp curtailing of Qatar LNG exports, including to Poland, stands to benefit US gas suppliers.

The creation of Poland's costly LNG terminal and its strategy to become a central European gas hub via the 3 Seas Initiative was not an idea born in Warsaw. It came from Washington, specifically from the geopolitical strategists of the Atlantic Council.

In April, 2017 the Atlantic Council held a conference in Istanbul on the 3 Seas strategy. The theme of the conference was «Making the 3 Seas Initiative a Priority for Trump.» The keynote speech was made by General James L. Jones, chairman of the Atlantic Council, and former Obama National Security Advisor. The Atlantic Council was present in Warsaw in July for the Donald Trump appearance at the 3 Seas Initiative meeting.

Another Initiative Shows Limits of 3 Seas
On November 27 a quite different forum assembled, hosted by a member country of the 3 Seas Initiative. The China - Central and Eastern Europe summit in Budapest, hosted by Prime Minister Viktor Orban included all 12 members of the 3 Seas Initiative as well as non-EU states Serbia, Bosnia Herzogovina, Macedonia and Albania.

The China-CEE countries discussed participation in China's vast One Belt, One Road infrastructure to increase European-Eurasian trade flows. They discussed creation of new infrastructure funds, of currency cooperation and much more. It was a far contrast to the prospects of the 3 Seas Initiative to spend billions in risky US shale gas LNG projects in order to alienate Russia and Germany further.

The contrast of the China-CEE summit to that of the 3 Seas Initiative couldn't be more stark. It shows the geopolitical fault lines of what little positive Washington is able to offer its European NATO allies today in contrast with the possibilities to join with China and Russia in building a new Eurasian infrastructure to Europe.

Author: F. William Engdahl, Global Research

Source : Neftegaz.RU