Russia opposes this project while giving support to those gas pipelines which directly connect it to Europe. One of such important pipelines is the Nord Stream which should run under the Baltic Sea directly to Germany. Contract for its construction was signed back in September 2005 under the patronage of German Chancellor Gerhard Schröder and Russian President Vladimir Putin.
This event took place just before the elections to Bundestag which were lost by Schröder and won by Angela Merkel.
The Nord Stream contract was signed by the Russian major Gazprom, having a 51% controlling stake in the project, and the German E.ON and BASF / Wintershall. The resigning German government at the last moment managed to approve guarantees for lending the pipeline construction. Gazprom has not yet taken such a decision. In early 2006, Gerhard Schröder moved to Gazprom to become a chairman of the supervisory board of Nord Stream AG, headquartered in Switzerland.
The new occupation of Gerhard Schröder caused an avalanche of criticism from all sides. As for the Nord Stream, first of all this project has been opposed by the public opinion in Poland, where it is seen as another Russian-German pact, threatening Poland's security and economic interests. The present Polish government adheres to the same position which is also shared by the governments of some East European countries.
While doing so, Poland remains the country which is almost 90% dependent on Russian gas and 100% on Russian oil. And it is interested in the highest possible volume of energy transit to Western Europe through its territory.
These days the transit is provided by the Yamal-Europe I gas pipeline, and it is planned to increase the transit volume by developing Yamal-Europe 2 project.
Germany does not approve the fact that gas and oil pipelines pass through Ukraine and Belarus, the countries which, as it thinks, can not provide safe transit. Therefore Nord Stream has been given adequate support by the present German government. Besides, it is difficult to characterize the stand of the Polish leadership as being fully transparent.
On the one hand, it is seeking to limit Russia's influence, for example through bilateral agreements with the United States to deploy American missiles on its territory. And on the other hand, Poland wants to keep its position as one of the major transit countries for Russia’s gas and oil. So, political and economic motives, to some extent, contradict each other.
Let's see what Nord Stream is like. This gas pipeline will pass along the Baltic Sea bed from Vyborg in Russia to Greifswald in Germany. Its total length will reach about 1,200 kilometers and it will consist of two parallel lines with a flow capacity of 27.5 bcm a year each.
This will be ensured through the use of 1,220 mm-diameter pipes to carry gas from the fields in Siberia. The €7.4bn project is to be launched in 2010. Its first unit is planned to be commissioned in 2011 and the second one a year later.
9% in the implementation of the project will be given to Dutch Gasunie operating the gas pipeline connecting Netherlands and Great Britain, so in future the Russian gas could reach the British Isles as well. The French major GDF Suez, which is some 34% state owned, is also considering to join the project.
One may ask, why am I telling all this in such a detail? Only because we should clearly understand that while some EU members, such as Czech Republic, for example, are seeking to reduce their dependence on Russia, the other states, especially from Western Europe, are building with it new energy relations.
Nord Stream will pass along the Baltic Sea bed through the territorial waters of Russia, Finland, Sweden, Denmark and Germany, and they should give it their consent. Other Baltic nations will express their views in the framework of the Espoo convention on the environmental impact assessment signed in Finland in 1991 and basically relating to the ecological problems. Up to now only Estonia has given its remarks on the project.
It is essential to say that Nord Stream is to deliver to Europe 55 bcm of gas accounting for less than 20% of all EU gas imports, and only about 50% of all gas consumed today by Germany (while this country is expected to increase the consumption). All this allows the German government to assert that the new pipeline can not replace the existing gas supply chain, for example the Yamal-Europe I gas pipeline passing through Belarus and Poland.
At present, Russia supplies to Europe via Ukraine and Belarus about 204 bcm of gas, so the Nord Stream and the South Stream projects will serve, above all, as the additional supply routes to bypass these two states.
The South Stream is the joint project of Russia’s Gazprom and Italy’s ENI and the gas pipeline will pass along the Black Sea bed from the Russian port of Novorossiysk to the Bulgarian Varna, and then follow in two directions – to Italy and to Central Europe.
The South Stream is the only project that is directly competing with the other, namely Nabucco pipeline. I should explicitly say that a number of EU countries express certain doubts about the South Stream, because the volume of annually transported gas will average 31 bcm only and its construction is the question of indefinite future. While Russia believes that as long as some EU countries have doubts about the abilities of Belarus and Ukraine to provide gas transit, it will be able to offer as an alternative the transit guaranteed by both Nord and South Streams with a total annual capacity of 85 bcm. A bird in the hand is worth two in the bush.
So to fulfill the Central European dream of independence from the Russian gas one should seek alternative sources, rather than to focus entirely on Nabucco, the important but not too real project.
Central European countries should try to find new gas suppliers in Western Europe or North Africa, Algeria, for example.
Or think about the gas liquefaction technologies and its transportation by sea and river routes and the construction of new gas storage tanks (such a decision, by the way, has already been adopted by the EuroCouncil), etc. Not to mention the energy saving technologies or the wider use of renewable energy resources and the nuclear energy.
When all this begins to work, it may happen that the huge investment in new gas pipelines will not be as profitable as it seems today. The world today is different than the one that was just a few years ago – more complex, interrelated, and, at the same time, more complicated for the human mind. It requires much more imagination and rejection of ideological dogmas.
Nord Stream and South Stream are important for all of Europe and it has already been confirmed by many European organizations. And political disputes, which have been held around these projects, are absolutely unnecessary, but, at the same time, quite understandable.
Europe should focus its attention on the environmental issues and make sure that both projects benefit as many countries as possible.
Europe needs and will need Russian gas, because Russia has huge deposits of these natural resources, in fact they are the largest in the world. On the other hand, Europe has great potential to solve its energy problem by other means and with long-term perspective. High technologies and vast intellectual resources are on her side.
The EU and Russia did not sign any joint documents at their summit in Khabarovsk on May 21-22, 2009, which was attended by Czech President Vaclav Klaus, who holds the rotating EU presidency, President of the European Commission Jose Manuel Barroso, EU High Representative for the Common Foreign and Security Policy Javier Solana, and Russian President Dmitry Medvedev.
President Medvedev confirmed Russia’s readiness to supply 19.5 bcm of natural gas for Ukraine’s underground gas storage tanks, but questioned Kiev’s ability to pay for it.
He therefore appealed to the European Union to lend money to Ukraine to pay for gas, saying that otherwise Europe could expect a repetition of gas problems next winter.
The backdrop for that meeting was the continued struggle over the Nabucco gas pipeline project, which is becoming increasingly improbable because it is not clear who will provide gas for it and who will finance construction.
Therefore, the Nord Stream and the South Stream are now the only realistic gas pipeline projects.
