Gazprom, Russia's state-owned gas company, says it will begin shipping fuel to customers in Europe through its Nord Stream 2 pipeline in about four years, but not everybody on the continent is happy about the prospect.
Valery Golubev, the deputy chairman of Gazprom's management committee, said Tuesday in Moscow that the pipeline project is on track to be commissioned in the fourth quarter of 2019. The conduit has a capacity to move 55 billion cubic meters a year from Vyborg, Russia, near St. Petersburg, across the Baltic Sea to the German port of Griefswald. It will be a twin of Nord Stream, which opened in 2012.
While many in Europe may applaud a potential doubling of the continent's gas supply, the prospect doesn't sit well with everyone, particularly the leadership in Ukraine. Golubev's announcement came a day after Ukrainian Prime Minister Arseniy Yatsenyuk predicted that the new pipeline would only enhance Russia's grip on Europe's energy supplies.
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In Brussels on Monday to attend the European Union-Ukraine Association Council, Yatsenyuk urged EU officials to reconsider their approval of Nord Stream 2.
"We consider this project should be stopped, as it is neither in the interests of the European Union nor in the interests of Ukraine," he said. "Nord Stream 2 deprives of billions of dollars of revenue Ukraine, Slovakia and Poland, but also deprives the European Union of real competition on the energy market and intensifies the monopoly of the Russian Gazprom."
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"We believe that our European partners would consider any energy projects solely from the point of view of compliance with the Third Energy Package," Yatsenyuk said. He was referring to EU legislation, adopted in 2009, designed to diversify its sources of energy.
Russia and Ukraine have long been at odds over gas. Ukraine previously relied on Russia for its gas, as have European countries farther to the west, which still depend on Russia for one-third of their gas supplies - half of that amount flowing through Ukraine. But Russia has repeatedly accused Ukraine of stealing some gas meant for the EU, and for that reason twice cut off the gas flow, in 2006 and 2009.
Ukraine isn't alone in opposing Nord Stream 2. Last month a group of Eastern European and Baltic EU members wrote a joint letter to European Union Energy Vice President Maros Sefcovic expressing their concerns about the second Baltic Sea pipeline.
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In their letter, they noted that after Russia unilaterally annexed Ukraine's Crimean peninsula in March 2014, the EU took steps to ensure its energy security by reducing its dependence on Russian energy, particularly gas.
Therefore, these nations wrote, it would be counterproductive for Germany to double the amount of gas it would receive from Russia through Nord Stream and, eventually, Nord Stream 2. They also noted that the EU halted a plan by Russia to build a similar pipeline to ship its gas to southern Europe.
Sefcovic said he was consulting with Germany's energy regulatory agency and had named a panel of energy experts from the European Commission to study the impact of Nord Stream 2, and was "preparing the answer" to the concerns raised by the Eastern European and Baltic states. While giving no indication what that answer might be, Sefcovic said, "For the European Commission, we will always seek the solutions that allow [energy] security for all member states."
By Andy Tully Of Oilprice.com
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Andy Tully is a veteran news reporter who is now the news editor for Oilprice.com More