/ world today news/ The decision on the construction of the gas pipeline from Russia to Germany will be made primarily at the political level, according to experts.
The leaders of eight European countries: the Czech Republic, Estonia, Hungary, Latvia, Poland, Slovakia, Romania and Lithuania sent a letter to the head of the European Commission, Jean-Claude Juncker, with objections to the expansion of the Russian Nord Stream gas pipeline.
Later, Croatia joined the opponents of the project. According to the Russian experts, the objections against the project have above all a political background. “We are observing the formation of a sufficiently large coalition within the EU of the countries opposing the project,” claims Alexander Grichenkov, an analyst from MFX Broker.
The Nord Stream-2 gas pipeline with a capacity of 55 billion cubic meters of gas per year was supposed to pass along the bottom of the Baltic Sea from Russia to Germany. With the completion of the first pipe of the gas pipeline, the volume of gas supplied to Germany should double and reach 110 billion cubic meters per year. The consortium involved in the construction of the gas pipeline includes the Russian Gazprom, the German companies E.ON and Wintershall, the Anglo-Dutch Shell, the Austrian OMV and the French company ENGIE.
The main reasons
According to the authors of the letter, the expansion of the gas pipeline will “have a strong impact on the development of the gas market and gas transit scheme in the region, especially the transit route through Ukraine.”
“Opponents of the Nord Stream expansion have become more active because Gazprom has already held an auction for the supply of pipes for the project without finalizing the agreement,” explains expert Alexey Kalachov, an analyst at Finam. The winner was the German Europipe and two Russian players: United Metallurgical Company and the Chelyabinsk Pipeline Plant. At the same time, the German company will provide 40% of the supplies. According to the Russian business newspaper “Vedomosti”, the value of the entire project will be $2.2 billion.
To start construction, Gazprom must obtain permission to lay the pipes in Denmark, Finland, Sweden and Germany, as well as from the German regulator for inclusion in the European network of gas pipelines, warns Alexey Kalachov. In addition, the European Commission may subject the project to the rules of the EU’s Third Energy Package, in which case it will be necessary to obtain consent from Brussels or to change the configuration of the project, Kalachov explains.
According to the rules of the Third Energy Package, the same country cannot be the supplier of energy resources and the owner of the gas transmission network at the same time. It was precisely because of this requirement that in 2014 the “South Stream” project, which was supposed to pass along the bottom of the Black Sea from Russia through Bulgaria to the southern countries of the European Union, was stopped.
Political risks
According to the analyst from IC “Premier” Ilya Balakirev, the decision on the future expansion of “Nord Stream” will rather be made by the USA and Germany. “If the American side manages to put the issue on the political plane, the risks will increase significantly,” says Balakirev. If the German companies manage to protect their commercial interests, the project will have a bright future, he adds.
In any case, according to Alexander Grichenkov, the decision will be political and will be tied to the Ukrainian crisis. Opponents of “Nord Stream-2” believe that the implementation of this project will deprive Ukraine of the opportunity to profit from the transit of Russian gas to the EU, i.e. will undermine Kyiv’s funding opportunities, including in its own revolving sector.
Poland has also joined in against the project, and the Polish Donald Tusk is currently at the head of the European Council, who is a supporter of the idea of ”energy security” of the EU, warns Grichenkov.
#fate #Nord #Stream2 #gas #pipeline #depend
