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Friday, October 21, 2016

Germany is using the Nord stream – 2″ to exert political pressure on Russia

Numerous claims that were put forward to Russia about the use of gas as an instrument of political pressure, the West can now pay in your own address. Germany for the first time officially announced Russia’s requirements for the project “Nord stream – 2”, and at least one of them is purely political in nature. Of course, associated with Ukraine. If Gazprom goes towards?

Germany is ready to support the project “Nord stream – 2” subject to three key conditions, said the Vice-Chancellor and Minister of economy and energy of Germany Sigmar Gabriel. First, it needs to comply with existing EU rules, and secondly, should not have any negative impact on the transit of gas through Ukraine, thirdly, should not prevent the supply of gas to Eastern Europe.

“With two conditions there are no problems, but with the preservation of transit through Ukraine Germany goes too far”

Gabriel then confirmed that it was already clear: the third energy package of the EU is not relevant to the project Nord stream – 2″. “We have a clear legal position, and I am sure that this position is shared by the legal service of the EC. It lies in the fact that the pipeline is not subject to the laws operating in the internal market of the EU”, – quotes its words Bloomberg. Nord stream – 2″, as well as the first pipe, does not go through the territory of the EU, therefore, is not subject to European laws.

It is interesting that Gabriel says that, from the perspective of Germany, the Nord stream – 2″ is a question that you need to assess from an economic point of view, not political. While exhibiting at the same time, conditions have a distinct flavour of the policy.

Such statements, the German representative made before the meeting of the representatives of Germany and the European Commission (EC), which took place on Wednesday in Berlin. It was discussed on the pipelines in the system “Nord stream”. Participation of the Minister and the European Commissioner for climate Miguel arias Cañete.

The negotiations themselves nothing new added. The position of Berlin concerning support of the project of the pipeline “Nord stream – 2” is unchanged, told RIA “news” the official representative of the German Ministry of economy and energy after the meeting.

According to her, these are the conditions that were formulated by Germany in the fall, and they have survived to this day. But to comment on the negotiations but she refused, Recalling again the words of the Minister that the Nord stream – 2″ is in this case a commercial project, a project of the consortium”.

The project “Northern stream 2 involves the construction of two pipelines with a total capacity of 55 billion cubic meters of gas per year from the coast of Russia through the Baltic sea to Germany. Gazprom will own 50% in the project, European companies OMV, BASF, Engie, Shell, Uniper (isolated from E. On) – 10%. The new pipeline is planned to be build next to the “Nord stream”.

With two conditions there are no problems, but with the preservation of transit through Ukraine Germany goes too far.

As regards the first condition – of conformity to European laws, the Minister of economy and energy of Germany he pointed to the fact that under the action of the Third energy package and the stream 2 is not covered. Speech can go only about the continuation of the pipe for the European territory – similar to the Opal pipeline.

“It is clear that European rules will be executed. Gas comes under the Baltic sea from Vyborg in Russia to Greifswald, Germany, and it will continue to be distributed, of course, by European rules. Gazprom has never insisted on the exclusion from the Third energy package, because the history of Opal it is clear that no exceptions will be”, – said General Director of national energy security Fund Konstantin Simonov.

Gas “Northern stream” comes to Germany, and on German territory through the Opal pipeline is delivered to customers. Because of the rules of the Third energy package, Gazprom is allowed to pump gas at the Opal only 50% of the capacity of the pipe. The remaining half was left for some “other vendor”, which, however, did not. It is just idle. According to the norms of the Third energy package in the EU to the pipeline should be available to any gas supplier. First, Gazprom tried to make exceptions (the TAP gas pipeline under Azerbaijani gas is given), but after futile attempts to have resigned. The same scheme will be used for the Nord stream – 2″, and here Gazprom does not even raise the issue of exceptions.

Exactly the same with ease Gazprom will fulfill another requirement “because of the North – 2” – not to interfere with gas supplies to Eastern Europe.

“How are we going to prevent alternative gas supply to Eastern Europe? For example, built the LNG terminal in świnoujście, however, it is empty. Poland is waiting for 1.5 billion cubic meters of Qatari gas when the capacity of the terminal is 5 billion cubic meters. We, perhaps, hinder the supply of LNG to the Polish terminal? No” – explains the expert gas.

There is also a plan for the construction of an LNG plant in Croatia and the coupling of the pipe with the Baltic terminal in świnoujście. “This is insane from a commercial point of view, but we are not preventing: want – build, if the money you nowhere to go. You have 80% of terminals in Europe are empty, but you continue to build them – for God’s sake. But we, as this could interfere?” “says Simonov.

Lithuania also built the LNG terminal and started to buy Norwegian liquefied natural gas. She has long promised to become the first buyer of U.S. LNG, but then changed his mind. “Lithuania refused to buy us LNG under the guise of environmental requirements, in fact its already not satisfied with the price. She is already thinking how to get back to the Russian supplies,” – said Simonov.

“We can not prevent the diversification of supply (Europe), even if such a desire will be. Just in Europe there is no alternative of gas physically, the volume, and secondly, our gas price continues to be absolutely competitive, and the period of low prices it more clearly showed,” – said the expert.

Moreover, even if competitors start a price war in the gas market of Europe, they just not strong enough to defeat Gazprom. Just a week ago, the Chairman of the Board of Gazprom Alexander Medvedev said that the cost of production of the company remains the lowest in the world: about $ 20 per thousand cubic meters (including tax).

In the summer of 2015, Gazprom said about the cost of gas production in 2015 at less than $ 30 per thousand cubic meters against $ 38 in 2014, including the met. In terms of rubles it was about 1435 roubles per thousand cubic meters. At the current dollar rate is just $ 20.

“It is obvious that we will survive even the price below $ 100 per thousand cubic meters, if we talk about price competition. No other manufacturer, including Norway, these prices will only be able”, – says the head of the NESF.

The only condition is that Russia is unable to perform fully applies, of course, requirements to preserve Ukraine as a transit country. “It is obvious that the commissioning of Nord stream – 2″ we will cut supplies through Ukraine. The direct route is built as an alternative to transit,” – said Simonov. But on the other hand, the Nord stream – 2″ completely kills the Ukrainian transit, because there is a problem with the supply of Russian gas to the southern countries: Greece, Bulgaria, Balkan countries (including Serbia) and finally Turkey. Estimated at the commissioning of the Nord stream – 2″ Ukraine will keep Russian gas transit in the amount of 20-30 billion cubic meters. In 2014 via Ukraine reached 62 billion cubic meters, in 2015 – For 65 billion that Ukraine received each year about 2 billion dollars of transit fees.

“It turns out that we can partially fulfill the condition: we will not completely stop the transit through Ukraine, if, of course, will not solve the issue of the “South”, “Turkish” or other similar tubing. If this issue is resolved, then the end of the transit through Ukraine as a whole,” agrees Simon.

In addition, it is worth Recalling that Germany, unlike, for example, from USA and Ukraine officially declares that the Nord stream – 2″ – a purely commercial project, in any case is not political. Why did she then put forward political demands to implement it?

“The requirement to keep Ukraine in the transit – purely political. In European rules somewhere it is written that a manufacturer must in the presence of Ukraine to use its capabilities and has no right to directly deliver the goods? This is not in any European law. On the basis of what we are obliged to guarantee the filling of the pipe? Through whom we will transit gas is a purely commercial issue. We have a contract with Ukraine ends January 1, 2020, we may well not to extend it, and it is a question of commercial relations,” says Simonov.

The paradox, in his view, that Europe is constantly accused Russia in the nomination of political demands, although primarily engaged in it myself. “We are constantly asked to save the Ukrainian transit. It is a political or commercial issue? If political, then we are not accused of politicization. If it is a commercial question, we performed a valid contract, and by 2020, the transit will, of course, but after to extend the commercial agreement or not is a question of our desire,” – says Simonov.

Here Europe needs to think about herself, what she wants is a reliable and assured supply of fuel or income for Ukraine. Because the preservation of the transit through Ukraine creates risks for the buyer of gas in Europe.

“They believe Ukraine is a headache for yourself or want in every way to help her? When in January 2009 gas crisis emerged, no European politician somehow has not stated that he is willing to take responsibility for Ukraine as a transit country. On the contrary, they all said that according to the contract Gazprom should deliver gas to the European borders, and what had happened with Ukraine – even he himself understands. Hence all these issues,” recalls Simonov.

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