Nord Stream and Western Speculation
Pyotr ISKENDEROV | 19.10.2015 | OPINION

Nord Stream and Western Speculation

In today’s environment, the implementation of Russia’s Nord Stream-2 project is a key element in ensuring European energy security. And the project is struggling on in spite of the obstacles being put in its way by the US and certain circles among the leaders of the European Union who are willing to sacrifice the interests of Europeans for their own geopolitical games and outright speculation.

There is no doubt that the decision by the Germany company BASF to invest nearly €2 billion in the construction of Nord Stream-2 over the next five years has been an important new factor in the development of the situation. The investment was announced by the company’s chief executive officer, Kurt Bock.

Nord Stream-2 involves the construction of two offshore pipelines from Russia to Germany along the bottom of the Baltic Sea with an aggregate annual capacity of 55 billion cubic metres in addition to the two lines already in operation. The project will be implemented by the New European Pipeline AG joint venture. Gazprom will own a 51 per cent share in the joint project company, while E.ON and BASF/Wintershall, the UK-Dutch company Shell and the Austrian company OMV will have ten per cent each and the French company ENGIE will have nine per cent. Tenders for the construction of Nord Stream-2 are to be announced as early as December this year.

The head of the German company also recalled that €10 billion has been invested in joint infrastructure development and underground storage projects with Gazprom over the last 25 years as well as an additional €2 billion that has been invested in gas production in Russia. Among other things, BASF is involved in the development of Achimov deposits through its subsidiary company Wintershall. The German company was also involved in the construction of a gas transmission network in Europe and the construction of underground gas storage facilities, including – as Gazprom’s partner – in the Nord Stream-1 project.

For his part, Gazprom CEO Alexei Miller stated that: «Our cooperation with BASF may serve as an example of trust between companies, an example of a strategic vision for the development of business and a striking illustration of a significant contribution to the EU’s energy security. With our German partners we have great plans and new ambitious projects lying ahead. I am absolutely sure we’ll be able to accomplish them successfully».

The implementation of these plans would undoubtedly be a serious blow to those political circles and structures trying to secure Ukraine’s key transit status so that they themselves can attempt to dictate their will to the countries of Central and Eastern Europe, to Russia, and to Ukraine itself. For Kiev, meanwhile, «loss of transit earnings is not the worst thing in this situation», quite rightly notes the German radio station Deutsche Welle. In this regard, a member of the German Advisory Group in Ukraine, Georg Zachmann, stresses that a rise in fuel prices could turn everything around for Kiev. «Without gas transits from Ukraine, Slovakia may no longer be in a position to provide cheap reverse flows back to Ukraine. Thus Kiev may have no choice but to import directly from Russia», says Zachmann.

«At present, we are practically giving Russian gas that comes from Ukraine back to Ukraine», said the Slovak company Eustream, which is currently Ukraine’s main ‘reverse’ supplier. «If supplies stop coming from Ukraine, then there will be nothing to give back», admitted an Eustream representative.

Even media outlets in Western Europe are finding themselves paying tribute to the resourcefulness and efficiency of Russia’s plans and projects. «In recent weeks, Gazprom has repeatedly shown how quickly it can adapt to new circumstances. Just on Friday, the company reached an agreement with Ukraine through the mediation of the EU on the terms of fuel supplies and the transit of gas to Central and Western Europe», stated the German newspaper Frankfurter Allgemeine Zeitung, among other things.

Jan Žižka, a journalist for the Czech independent online magazine Česká Pozice, also candidly pointed out that: «Gazprom is turning towards Europe». He is convinced that the «agreement between Gazprom and BASF will only be a prelude to another large-scale project» – Nord Stream-2. «If we add to this the planned Turkish Stream pipeline in southern Europe», writes Žižka, «then Russia will be able to dispense with the transit of gas through Ukraine completely, the strategic importance of which will decrease significantly, as will the importance of Slovakia». «And it is this that is raising concerns», particularly for «Washington’s security strategists», stresses the Czech journalist.

«In this instance, Gazprom is not lacking in partners and the Germany companies E.ON and BASF, the Austrian company OMV, the French company ENGIE and the UK-Dutch company Shell are all willing to work with the Russian company. In its analysis, the private US intelligence company Stratfor comes to the conclusion that an agreement between these companies on Nord Stream-2 will enjoy the direct support of the German government», the Czech publication states.

It is clear that increasingly influential European forces are finding themselves objectively compelled to side with Russia in energy debates. It is therefore also time for countries like Slovakia, Serbia and Hungary to be governed by their own ‘gas’ priorities.

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