Monday, December 4, 2023
 
 

Russia, Austria, Germany, Plan Ukraine Gas Pipe Bypass

EU laws and the Greek crisis complicate Turkish Stream while Nord Stream II is easier from a regulatory point of view, an UralSib analyst tells New Europe

- Advertisement -

Gazprom and Austria’s OMV discussed on July 8 in Berlin further actions within the Russian gas monopoly’s Nord Stream II gas pipeline project, particularly setting up of a joint venture to be responsible for the gas pipeline design, construction and operation. The pipeline is in line of Gazprom’s strategy to completely bypass Ukraine by 2019.

Gazprom CEO Alexey Miller said at a meeting with OMV CEO Rainer Seele that the target markets for the Nord Stream II gas are the same as for Nord Stream I, noting that up to 15% of all the gas transported via the Nord Steam II flows to the United Kingdom.

Miller and Seele also touched upon the acquisition of a stake in the joint venture by OMV, which is a major partner of Gazprom in Austria.

On June 18, Gazprom, which owns 51% in the project to build Nord Stream II, Germany’s E.ON, Anglo-Dutch Shell and OMV signed the Memorandum of Intent stipulating the construction of two strings of the Nord Stream II gas pipeline with an aggregate annual capacity of 55 billion cubic metres, to be laid from the Russian coast to the German coast via the Baltic Sea. The first two strings of the Nord Stream pipeline have been operational since 2011 and 2012 respectively, with the annual gas capacity of 55 billion cubic metres.

Separately, Gazprom discussed with BASF the possibility of the German firm participating in Nord Stream II. The Russian firm said it had met BASF officials in Berlin on July 7, but did not give further details.

BASF oil and gas subsidiary Wintershall has previously said in June that it is keeping faith with its Russian investments and wants to do more there, despite tense EU-Russian relations over Moscow’s annexation of Crimea and its role in Eastern Ukraine.

Alexei Kokin, a senior oil and gas analyst at UralSib Financial Corp in Moscow, told New Europe on July 8 that from the very start Turkish Stream was a very questionable project. Nord Stream has always been easier from the regulatory point of view, he added.

“Anything beyond the first stage of Turkish Stream has been put on hold so the southern pipeline will probably be limited to the 16 bcm per annum line for the time being. My guess is that’s why Nord Stream has become the number one priority because Nord Stream itself is exempt from EU rules,” Kokin said.

He noted that Turkish Stream would be built into some minimal configuration. “It won’t necessarily extend into the European Union and the reason is pretty clear: there is no agreement with Turkey,” he said, adding that Gazprom and Turkey’s Botas disagree over the gas price.

On top of that the Greek crisis doesn’t make things easier. “Definitely the whole Greek turmoil is probably making things a bit difficult. It’s hard to negotiate. Any long-term commitments will be difficult to obtain from either from Greece or the European Union,” Kokin said.

He also said Gazprom has enough extra production capacity in Yamal in northwest Siberia to supply 55 billion cubic metres to Nord Stream II. “That’s all doable. The only big question is how Europe’s distribution system will work,” he said.

follow on twitter @energyinsider 

- Advertisement -

Subscribe to our newsletter

Co-founder / Director of Energy & Climate Policy and Security at NE Global Media

Latest

US-Central Asia relations: It’s time for a Green 5+1

During the United Nations General Assembly in September, a...

Ukraine, Middle East will dominate Cameron’s UK foreign policy agenda

David Cameron, who was made Foreign Secretary in a...

What will it take to prevent a Gaza reconstruction fiasco?

Let us be unequivocal about the current war between...

Don't miss

US-Central Asia relations: It’s time for a Green 5+1

During the United Nations General Assembly in September, a...

Ukraine, Middle East will dominate Cameron’s UK foreign policy agenda

David Cameron, who was made Foreign Secretary in a...

What will it take to prevent a Gaza reconstruction fiasco?

Let us be unequivocal about the current war between...

Ukraine’s persecuted mayor

Lest it be forgotten, the major thematic issue in...

US-Central Asia relations: It’s time for a Green 5+1

During the United Nations General Assembly in September, a historic meeting took place: President Joe Biden met with the presidents of the five nations...

Ukraine’s persecuted mayor

Lest it be forgotten, the major thematic issue in post-Maidan and pre-war Ukraine was, and continues to be, the transformation of Ukrainian society along...

Cameron’s return as Foreign Secretary raises UK’s international profile

David Cameron, who was made foreign secretary in a surprise move by Prime Minister Rishi Sunak during his cabinet reshuffle on November 13, brings...

Russia’s powerful economic levers over Armenia

Armenia's relations with its strategic partner Russia are getting worse and worse and its leaders seem to desire a shift in geopolitical orientation towards the West....

Economy Minister says Kazakhstan to expand investment and diversify trade with Europe

Kazakhstan’s Minister of National Economy, Alibek Kuantyrov, spoke to NE Global in an exclusive interview about his country's relations with Europe, Astana's economic partners,...

Meeting conditions for Georgia’s EU accession is a tall order for Tbilisi

The European Commission’s provisional endorsement of Georgia’s EU chances contained a not-so-subtle message couched in diplomatic jargon: Tbilisi must forge a stronger national consensus...

New US actions against corruption and Russian malign influence in the Western Balkans

On November 16, the US Department of the Treasury’s Office of Foreign Assets Control, known by its acronym OFAC, designated eight individuals and six...

The EU Green Deal is a barrier to trade and global partnerships

There is an English saying that if you can’t see the wood for the trees, then you should step back and then you will...