The main intrigue of Nord Stream

On November 8 President Dmitry Medvedev of Russia and Chan­cel­lor Angela Merkel of Germany offi­cial­ly launched the Rus­sian-Ger­man Nord Stream gas pipeline. Start­ing in the swamps of Karelia, Nord Stream passes on the Gulf of Finland’s shallow bed to the Baltic Sea and rea­ches the territory of Germany, by­pas­sing Belarus and Ukrai­ne, the coun­tries that currently transport Russian gas to Europe. As is known, the Rus­sians began to build Nord Stream in 2005 after the first Ukraine-Russia dis­pu­te over gas. But the idea of this project was marketed for the first time as long ago as 1996. This means it took Nord Stream about 16 years to ma­te­rialize. The stark real­ty is that Ukrai­nian politicians have again shown their short­sighted­ness, failing to take into account the risk of the “Schroe­de­ri­zation” of Euro­pe and, what is more, forgetting that the world is com­pe­ti­tive, which is one of the key maxims of a market eco­no­my.

According to official Russia information, the capacity of the first stage of the world’s longest 1,224-km gas pi­peline is 27.5 billion cubic meters a year. This figure actually reveals the project’s main intrigue – how much gas the EU countries will be receiving by way of this pipeline that bypasses Ukraine which is currently supplying about 80 percent of Russian gas onto their markets.

As it was reported earlier, Russia’s Prime Minister Vladimir Putin said, visiting the Vyborg gas-compressor station, that the launching of Nord Stream would strip Ukraine of the exclusive status of a country that transports Rus­sian gas to Europe. Following the premier’s statement, Gazprom general manager Aleksei Miller hinted in no uncertain terms that Ukraine would have to say goodbye to “freebie” gas. “Our Ukrainian colleagues have jumped on a train called ‘cheap Russian gas,’ but they don’t know the station to get off at. Nor do they know that they might as well end up in a blind alley,” Miller said.

Yet, in spite of the Russian side’s claims about a successful bypass of the transit countries, the experts polled by The Day are not inclined to think that Ukraine should be afraid of Nord Stream in the nearest future. The launching of Nord Stream will not relieve Russia of the necessity to use the Ukrainian transit, even with due account of the Blue Stream pipeline to be laid on the Black Sea bed. The experts believe that the launching of Nord Stream will just slightly reduce Russia’s dependence on Ukraine. The Ukrainian gas transportation system still remains the largest supplier of Russian gas, and this situation will not change in the next 10-15 years even if the Russian government makes an all-out effort to build any other pipelines. Building new gas transportation pi­pelines is too costly a thing for the Kremlin, not to mention Europe as a whole.

Incidentally, the latter responded rather cautiously to the launching of Nord Stream. In particular, Janusz Lewandowski, EU Commissioner for Financial Programming and Budget, believes that this pro­ject will in fact increase the European states’ dependence on Russia as the only supplier of gas. In his words, Nord Stream is “a monument of bilateralism” between Russia and Germany. At the same time, Lewan­dow­ski emphasized that the European Commission had approved on September 7 a document on the EU’s increased coordinating role in the energy relations between the member states and their fo­reign partners. This will oblige all the EU member states to inform one another on the negotiations that precede the signing of energy contracts similar to the one German and Russia have concluded.

COMMENTARIES

“RUSSIA IS REPEATING THE MISTAKE BREZHNEV ONCE MADE IN THE SOVIET UNION”

Bohdan SOKOLOVSKY, former autho­ri­zed representative of the president of Ukraine for the international aspects of energy security:

“As far as Ukraine, its pipelines and energy security are concerned, the launching of Nord Stream means, in the short term, partial redistribution of the northward transport flows across this country. Later, as long as this project was intended for a different source of gas which cannot be optimally transported through Ukraine (I mean Russia’s northern gas fields), Nord Stream will have no tangible effect on Ukrainian transit.

“In my view, Russia is repeating the mistake Brezhnev once made in the Soviet Union, when he built a lot of West-oriented oil and gas pipelines. Then Europe slashed fuel prices, which resulted in the collapse of the USSR.

“This gas transportation story of Russia and Europe began way back in the Soviet era. At the time, Europe planned to influence the USSR by means of gas, while the USSR in turn expected to be able to impact Europe from inside by way of the pipelines. As history shows, Europe, quite actively assisted by the US, won this ‘duel.’ Nobody can say clearly what motives are behind the current actions. But, in my view, there is good reason to believe that both sides are taking the same approach as before.

“Let us face it: neither Europe nor Russia has a place for Ukraine in this process. Or, maybe, it is even better? For, if the bulk of the gas does not go to the West across our country, Ukraine will get rid of the headache that occurs every two years, when claims are raised against us. Transit fetches us an annual 1.5 billion dollar at the most. This is not worth the political problems that Ukraine has each time. It is better not to be a transit state. It would be better to offset these 1.5 billion dollars of budget revenues by way of developing other sectors, live without problems, and hold the gas transportation system in our hands only.

“For the primary purpose of this system is to furnish the Ukrainian consumer with gas. And in no case, under no circumstances, should this function be put under the control of any other state, especially the Rus-sian Federation.”

“UKRAINE REMAINS THE PRINCIPAL TRANSIT COUNTRY FOR US”

Rainer LINDNER, director, Committee on Eastern European Economic Relations, Germany:

“Nord Stream is a very important project for German and European energy security and, naturally, for German-Russian relations. This and some other projects, to be built in the next few years, are also important for the European economy and security. But I think the fact that Gazprom still remains the source of these supplies will not strengthen the German economy. For example, Germany has effected some energy changes by shutting down nuclear power plants. We must make up for 30 percent of our energy resources, and, in reality, Rus-sian gas is the main source of this compensation.

“Surely, Ukraine remains the principal transit country for us. In the future, too, the German economy will take part in developing the Ukrainian economy, including its energy sector, and we must think of the new sources of gas which are expected to emerge in the next few years.”