Russia launches strategic gas pipeline project
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Russia launches strategic gas pipeline project
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Russia launches strategic gas pipeline project
12 Dec 2005  printer version
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raiting (1/3) Celebrations devoted to the launch of the construction of the North European Gas Pipeline, held on December 9 in Babayevo, the Vologda region, are one of the year's major political events. The guest list proves the importance of the project to its key members, Russia and Germany. The Russian party was represented by Prime Minister Mikhail Fradkov, Gazprom's chairman of the board board Dmitry Medvedev, ministers Sergei Lavrov, Viktor Khristenko and German Gref. The German delegation was led by the economy and foreign ministers and included leaders of all parliament factions, both governmental and opposition, and the new leader of Germany's Social Democrats, potential Chancellor Matthias Platzeck, as well as Klaus Mangold, president of the Eastern Committee of the German Economy. Gazprom's partners in the project, E.ON Ruhrgas and BASF, were also represented. The first line is to be put into operation in 2010. The 3,000-km pipeline will go across Germany and the Netherlands to Bacton (Britain). The project creates a new route for Russian gas exports to Europe. It will allow diversifying export flows, maneuvering them and directly linking the Russian and Baltic gas transportation networks to the European one. The specific feature of the new gas pipeline is that it bypasses any transit countries, this way reducing transportation costs. It was the negative reaction of transit countries - Poland, Ukraine and the Baltic states - that created a very tense political context in which work on the pipeline was done. These plans have incensed the Baltic states and Poland, as the route will bypass their territory. Recently, Russian Foreign Minister Sergei Lavrov told journalists that Russia welcomed any additional participation in the project. "Any additional participation is welcome, but the Russian share will remain 51%," he said. Poland's response was more than reserved. Piotr Naimski, Polish Deputy Economy Minister, said, "I do not see that Poland has an interest in investing in the venture." The shortsighted attitude adopted by the European Union's eastern members surprised the world. The pipeline construction, according to a respectable Mexican publication, La Jornada (November 7, 2000), "allows bypassing the obstacle represented by the Baltic republics and Poland. Provoked by the Bush administration that has nothing to offer except illusions, they have adopted unacceptable disrespect towards their two powerful neighbors, Russia and Germany. You have to pay a lot for geopolitical follies. The Baltic countries and Poland, which have the right to demand justice for their past tragedies, have gone too far in their atavistic squabble with Russia." Russia's relations with Ukraine, its main partner in gas transportation to Europe, have recently become even more strained. Kiev flatly refuses to sign a new agreement that introduces market prices for gas supplies and transit. Ukraine's trump card in the dispute is its position as the transit country on the way to Europe. In fact, Kiev politicians are blackmailing Gazprom, which has serious obligations to European consumers. Russian Prime Minister Mikhail Fradkov tried to find a way out of the deadlock and during his visit to Brussels offered to review the terms of gas supply to Europe. He proposed that gas should become European property at the Russian-Ukrainian border instead of the Ukrainian-EU border as is the case now. Then Kiev would have to try to blackmail the Europeans, which would seriously weaken the claim of its politicians for recognition and broad integration, including political, in the European Union. Europeans are in no hurry to accept the burden of Ukrainian claims. However, the concern about uninterrupted gas supplies is mounting as the year-end is drawing closer, approaching the end of the present Russian-Ukrainian gas contract. President of the European Commission Jose Barroso has acknowledged that he and British Prime Minister Tony Blair had taken up the issue of gas transit guarantees at their meeting with Ukrainian President Viktor Yushchenko. This provided Russia with an additional trump card at the talks. The EU de facto engaged in the dispute, which allowed Russian President Vladimir Putin to take a tough stand. The Kremlin's position is that Gazprom will honor its European contracts even without an agreement with Ukraine in place. At the same time, if Kiev takes any inadequate steps in the gas sphere, Russia may respond by reducing supply of Turkmen gas, which accounts for almost half of Ukraine's gas demand. This can also be done if Ukraine attempts to drastically raise transit tariffs. Simultaneously with President Putin's statement, Russia signed a gas agreement with Belarus, which next year will continue buying gas at discount prices. Ukraine was shown a possibility of a favorable energy problem settlement when a "correct" foreign policy is conducted. When the agreement on the pipeline project was signed in September, it immediately gained interested fellow travelers. British Energy Minister Malcolm Wicks announced right after the signing of the deal that Europe's energy supply in the coming decades would depend on relations with Russia. Highlighting the importance of future energy cooperation with Russia once again, he corroborated Henry John Palmerston's maxim that Britain had no permanent friends, only national interests. The same is true of many European states that have rendered significant support to the project. The almost universal desire of West European countries to play some part in the project and receive large quantities of Russian gas is dictated by their national interests: a desire to ensure energy security. This fits very well with Russia's plans. Russian officials have repeatedly emphasized that the North-European pipeline aims to ensure Europe's energy security. At the project inauguration ceremony, Prime Minister Fradkov said, "We are creating conditions for stable cooperation in the energy sphere and to ensure energy security of Europe and the world." All the more so, considering that while it is guaranteeing this security Moscow is boosting its geopolitical influence. Dr. Igor Tomberg, senior associate of the Economics Institute of the Russian Academy of Sciences, for RIA Novosti Source: Other articles in Business, Finance:  Readers' Comments
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