The 33 billion cubic meters per year (bcm/y) that Europe receives via the Yamal–Europe Pipeline is slightly over 27% of its total natural gas imports from Russia. Of that total, Western Europe receives almost three-quarters and Eastern Europe the remainder; however, the relative dependence upon that gas is much higher among the East European countries.
ANALYSIS: Administrative and political issues have been complicating its continued operation, but a Russian gas cutoff as happened with Ukraine does not appear in the cards.
The Yamal–Europe pipeline runs southwest from the Yamalo-Nenets Autonomous Okrug, a district in Russia’s Arctic administered by the Tiumen Oblast (region). One thousand nine hundred miles later, it crosses into Belarus, then 360 miles later into Poland, before running 420 miles inside Poland (JAMAL) to the German border, where it connects up with the domestic German pipeline system (JAGAL). The 33 bcm/y of gas currently filling the pipeline do not actually come from the Yamal Peninsula but rather from the Nadym Pur Taz district in the Tiumen region.
The pipeline is owned by Gazprom, with the exception of the Polish section. The latter is a joint venture among Gazprom and the Polish companies Polish Gas-Trade and PGNiG. The pipeline is operated in Russia by Gazprom, in Poland by the Russo-Polish joint venture, and in Belarus by the state company Beltransgaz. Complications have recently arisen from the fact that Poland, under new EU competition regulations in the energy sector, is obliged to give foreign companies access to the pipeline.
The development of resources in the Yamal Peninsula proper has consistently fallen behind schedule. State funding has increased since 2009, but an established long-term financing plan does not seem to be in place. This makes it questionable whether the Bovanenkovskoe field, the main Yamal deposit, will be developed within the current revised timetable, even though it might help to resolve the worsening gas deficit in the country. This remains a major big-ticket Gazprom project but its gargantuan dimension, even by Russian standards, makes full implementation questionable.
BOTTOM LINE: Belarus, Poland, and Russia signed intergovernmental agreements on the Yamal-Europe Pipeline in 1993, and the following year a Gazprom-Wintershall joint venture began building the German segment. First-stage gas transmission began in 1997, and the segments through Belarus and Poland were finished in 1999. Since 2005, when construction of all compressor stations was accomplished, the pipeline’s throughput has reached the final-stage projected capacity of 33 bcm/y. There had been plans to build a second 33 bcm/y pipeline, Yamal–Europe Two, through Belarus, to Europe, but Poland and Russia disagreed over the route. Poland wanted it to go through southeast Poland, to Slovakia and Central Europe. Those plans were, however, indefinitely shelved in 2007 in favor of constructing the Nord Stream pipeline under the Baltic Sea from Russia to Germany.
Gazprom and the Belarusian state company Beltransgaz have been in conflict over the amount of Belarus’ debt for gas purchases, as since 2006 Russia has sought to raise its price to “market” (i.e., Western export) levels. Belarus’ President Aleksandr Lukashenka insisted that his country’s participation in building a customs union with Russia and other former Soviet republics entitled it to a recalculation of gas import prices from Russia. (The matter is complicated by the need also to account for Gazprom payments to Belarus for transiting its gas to Europe.) Gazprom replied that the contract formula had to be respected; it has since gained half-ownership of Beltransgaz in partial payment of the accumulating debt. In June 2010, Russia began gradually reducing volumes transmitted to Belarus, which responded by paying the amounts demanded.
Russia is contracted to supply gas to Poland through 2022, and the gas transit contract through their joint venture is in force through 2019. At a November 2010 meeting in Moscow, Gazprom chief Alexei Miller and EU energy commissioner Guenther Oettinger agreed to form a joint working group to discuss how to implement the EU’s Third Energy Package (recently elaborated and which extends through 2020) and how this affects long-term contracts that Gazprom had earlier signed with now-EU member states. Warsaw and Brussels intend to implement mutually agreed rules on how to calculate available network capacity, allocate it “on a transparent and non-discriminatory basis,” implement obligatory reverse-flow services, and condition Yamal’s future development and expansion.