On November 17, Russian and Ukrainian delegations held secret talks in the United Arab Emirates (UAE), the reason for the meeting was the discussion of the launch of an ammonia pipeline from Togliatti to Odessa, Reuters reports . Before the war, more than half of Russian ammonia exports went through the ammonia pipeline, since February 24 it has not been working.
The composition of the negotiating groups is unknown, the parties hide even the very fact of negotiations and are not ready to share details. Reuters sources were unable to ascertain whether any progress has been made or not. However, the fact of a personal meeting between representatives of the two countries is already a positive moment, the agency notes.
Previous leaks from the negotiation process boiled down to the disagreement of the parties on the issue of the exchange of prisoners. The Ukrainian side insists that in order to launch the pipeline, it is necessary to exchange prisoners according to the “all for all” formula or close to it – President of Ukraine Volodymyr Zelensky insisted on such a condition. The Russian side was initially categorically against such a position – the press secretary and deputy head of the presidential administration, Dmitry Peskov, called this demand "inappropriate." “Are people and ammonia the same thing?!” Peskov said in September.
Now, probably, the positions of the parties have softened: Ukraine insists on a major exchange of prisoners, and the Kremlin is ready to consider such proposals. This is also evidenced by Vladimir Putin's recent meeting with the owner of Russia's largest fertilizer producer, Uralchem, Dmitry Mazepin. The sanctions billionaire complained to the president about the severity of Western sanctions that have left Russian companies, and him in particular, stuck with hundreds of thousands of tons of fertilizer in European ports.
However, Mazepin paid special attention to the notorious ammonia pipeline. According to the businessman, from an economic point of view, everything is ready for launch, but "the Ukrainian side puts forward a number of political issues in which we are incompetent." Representatives of Mazepin, he said, also tried to enlist the support of the UN, but to no avail.
Mazepin's participation in negotiations of this level is not accidental . Firstly, the billionaire owns the largest fertilizer producer in Russia, the Uralchem holding. Secondly, just a few weeks before Russia's invasion of Ukraine, Mazepin gained control over Togliattiazt – it is this company that owns the very ammonia pipeline, without which the company's production is simply useless, since the product is almost impossible to export in any other way. The billionaire is called the main beneficiary of possible agreements between Russia and Ukraine, as his enterprise will start working again.
What is an ammonia pipeline and why is it needed
The Togliatti-Odessa pipeline was built back in the 1970s, equipment for its construction was supplied by the American company Occidental Petroleum. The pipeline was built as reliably as possible – the delivery technology made it possible to avoid any damage due to corrosion, and on all difficult sections of the route (roads, water bodies, etc.) the “double pipe” principle was used – double walls protected against corrosion, and the increased thickness of the pipes such areas allowed to withstand increased pressure.
Perhaps it was American pipe-laying technology that allowed the ammonia pipeline to survive the hostilities – in September, a source close to the Russian authorities claimed that "not a single fragment hit the pipe." Although he could very well – the ammonia pipeline passes through the territory of Kharkov, Dnepropetrovsk, Kherson, Nikolaev and Odessa regions. At least in the Kharkiv and Nikolaev regions, the pipe was located in the zone or as close as possible to the combat zone. However, the potential readiness of the Ukrainian side to launch the pipe in a short time indicates that there are no significant damages.
The maximum capacity of the pipeline is estimated at 2.5 million tons of ammonia per year, which is approximately 57% of all Russian ammonia exports in 2021, the remaining 1.9 million tons came from the Baltic ports, which are inaccessible in the current realities. The main buyers of Russian ammonia were fertilizer producers from Morocco, Turkey, as well as from Southeast Asia and Africa.
Russia's share in the ammonia market is estimated at about 20%, and even higher in the fertilizer market. It is this fact that explains the interest of the UN in returning Russian fertilizers to world markets, which will bring down prices for fertilizers, as well as significantly increase supply on the world market, which should mitigate food security problems in poor countries in Africa and Asia.
Ammonia supplies through the pipeline could also be resumed under the “grain deal” that Russia, Turkey, the UN and Ukraine renegotiated on November 17, but by that time the parties could not agree on the conditions for resuming the operation of the ammonia pipeline and the supply of fertilizers, although initially the Russian side hoped that they can be included in the deal.