«Do I have a plan? I have three whole plans!» once declared the hero of a popular animated series based on a work by Jules Verne. And it would be worth asking the same question to all those involved in the global energy games. Russia and Turkey definitely have more than one plan regarding the transportation of energy resources. Their plans are being developed increasingly actively and are being pushed forward by Central European countries headed by Slovakia. And what about Serbia? Does Aleksandar Vučić’s government (which bought 1.5 billion cubic metres of gas from Gazprom in 2014, more than any other former Yugoslav republic put together) have any kind of independent and thought-out plan besides the appeals ringing out, with or without reason, to its «American friends»? Or are the Serbian authorities actually preparing a secret channel for tankers with liquefied natural gas to get to Belgrade?
The Turkish Stream project, meanwhile, is slowly but surely gaining international momentum, claiming to be unprecedented in terms of its scale and its impact on the gas transmission infrastructure system covering both Southeast and Central Europe. Potential participants include Hungary, Romania, Bulgaria and Slovakia. The latter is currently the most active in the energy field, with a good understanding of the operational nature of the problems facing Slovakia and the whole of Europe in the field of energy security.
«With regard to Turkish Stream, we obviously think that if it becomes a reality, Slovakia would propose the Eastring project, connecting Turkish Stream to Slovakia’s energy system. This would then solve the problem of energy security from the north to the south», said Slovak Foreign Affairs Minister Miroslav Lajčák, confirming Bratislava’s position in an interview with the Russian information agency TASS. He recalled the productive talks on the issue held by Slovak Prime Minister Robert Fico in Moscow in early June: «Mr. Fico told his Russian partners about the project and we have already signed a political declaration at the level of the foreign ministers of Slovakia, Hungary, Romania and Bulgaria». According to the head of Slovakia’s Foreign Affairs Ministry, the Eastring project is a kind of ‘Plan B’ should Russia cease transporting its gas through Ukraine after 2019.
It is clear that the authorities of Slovakia (a member of NATO and the EU) cannot say anything themselves about the unacceptability of transporting gas through Ukraine. It is fully understand, however, that no matter what form Ukrainian statehood will have taken by 2019, neither Russia nor anyone in their right mind in Europe will continue to let its energy security be taken hostage by Kiev. So Turkish Stream, with the Eastring gas pipeline and other regional networks connected to it in one way or another, is now already being regarded as more or less the only plan for the uninterrupted supply of cheap gas to Europe.
That the importance of Russian gas supplies to Europe is continuing to grow despite all the negative political factors and speculations is evidenced by the latest interim figures for the current year revealed by Gazprom CEO Alexei Miller. Speaking at the Europe’s Energy Sector: Its Structure and Place in the Global Market conference, he said that «the volume of gas supply to Europe, Gazprom’s supply in 2015 shows an upward trend in comparison with the similar periods of 2014. We observed this trend in April and it has continued in May». According to Alexei Miller, Russian gas supplies to Europe in May increased by more than 5 per cent compared to May 2014. As is known, the share of Gazprom gas in the European gas market at the end of 2014 was 30 per cent, and what is significant is that this share has grown steadily for the last three years. With regard to the share of Russian gas in the volume of EU imports and in the overall volume of EU gas consumption, meanwhile, it currently amounts to two thirds of total imports. «We can confidently state that the volume of imports to the European market will only grow», predicted the Gazprom CEO.
The above-mentioned growth in Russian indicators is taking place amid a simultaneous drop in gas supplies to Europe from other sources, despite the fact that the share of imported supplies to the European market has grown by 17 per cent over the last 15 years. Rates of growth like these will continue for the next 15 years.
An important factor is the continuing and steady reduction of gas production in Europe itself. According to Gazprom, the decline in European domestic gas production will equal 80 billion cubic metres of gas by 2030. The role of liquefied natural gas is also falling. In 2010, its share of European consumption was 30 per cent, but over the last five years this has fallen to 12 per cent.
On the subject of Qatar, which is always present in every scenario involving the «liberation» of Europe from the notorious «Russian gas dependence», those in support of this idea love discussing the enormous gas resources of this Persian Gulf country which, according to some sources, is estimated at up to 15 percent of the world’s reserves. It is less well-known, however, that the Qatar authorities have embarked upon an ambitious programme known as «National Vision 2020», a key element of which is large-scale investment in renewable energy as a major national goal. This can mean nothing other than a withdrawal from the prioritised development of the gas industry, with all the consequences that that implies for Europe.
When it comes to absolute indicators, then European demand for Russian gas in the medium-term could total up to 120 billion cubic metres of gas per year. This means that everyone concerned, including EU leaders and the heads of European countries, needs to sit down and have comprehensive and heavy-duty negotiations with Russia. This includes on the Eastring project, which Gazprom CEO Alexei Miller regards as «very interesting», but still lacking a «feasibility study» and in need of a clearly-worked out membership list and resource base parameters.
According to Miller, «if we try to formulate what the current European gas market is now», then it is a market «with not so many suppliers standing in the waiting line», and these days, every clear-thinking expert agrees with him.