Poseidon's privilege

The European Commission responded asymmetrically to Gazprom

The Gazprom Board of Directors yesterday took note of information about the concern’s comprehensive program of activities in foreign markets, the strategic goal of which is to create “a global diversified energy company, a world leader in the oil and gas industry.” Meanwhile, Europe continues to frantically search for asymmetric measures to reduce dependence on energy resources from Russia. Brussels’ desire to give way to projects that plan to transport “non-Russian” gas to the EU is so great that officials stepped on the throat of their own song about the unconditionality of market liberalization. Thus, yesterday it was announced that the owners of the new Poseidon gas pipeline between Greece and Italy will be allowed to exclusively manage most of the pipeline's capacity. Among other things, the EU is making it clear to Moscow that they are ready to apply double standards to players in the market, and the opportunities for liberalization (like the subsoil in Russia) may not be available to everyone.

Previously, the European Commission vigorously fought for equal access for suppliers to infrastructure and even threatened to forcibly separate companies into those transporting and selling gas. And the explanation for the current decision, which contradicts such a policy, is simple - the new gas pipeline should make it possible to deliver part of the gas from the Azerbaijani Shah Deniz field to Italy. And give other potential suppliers - Kazakhstan and Turkmenistan - a positive signal about the prospects of the export route bypassing Russia. It is characteristic that the decision of the EU antimonopoly authorities, which does not fit into the concept of market liberalization, was made a few days after the presidents of Russia, Kazakhstan and Turkmenistan signed a declaration on the construction of a new Caspian gas pipeline . If implemented, it will make alternative gas transportation projects in the region essentially impossible, because for them gas in the Caspian Sea is only available in theory.

The struggle to fill the eight-billion-dollar Poseidon is just a prelude to more serious gas transportation battles. The Nabucco project (from Turkey to Austria in transit through the Balkans), which is being promoted by the Austrian OMV with the support of Brussels, and the South European Gas Pipeline (a project of Gazprom and the Hungarian MOL) from Turkey to Northern Europe are already fighting to supply gas to the south of Europe. Italy. However, it cannot be ruled out that, despite all the efforts of Brussels to diversify supplies, these projects could be combined. Today the Russian delegation led by Vladimir Putin will arrive in Austria. Gas cooperation will be the main topic on the agenda of the visit. Moreover, as reported by Bloomberg, citing the Austrian Court of Auditors, Gazprom and the leader of Nabucco intend to approve a document called “Memorandum of Agreement for the supply of gas to Central and Eastern Europe.” And Austrian President Heinz Fischer said in an interview with Interfax that Gazprom could “use Nabucco to supply additional volumes of gas to the European Union.”

The Poseidon project involves the construction of a 212 km long pipe along the bottom of the Adriatic Sea from the Greek Stavrolimenas to the Italian Otranto. In 2002, the state-owned company DEPA, headquartered in Athens, and Edison, the largest private company in the Italian energy market, agreed on its construction. The annual throughput is planned at 8 billion cubic meters. The start of construction is scheduled for 2008, and commissioning for 2011. In parallel, the project participants agreed with the Turkish Botas to build a gas pipeline connecting the systems of Greece and Turkey. The entire project, including the onshore pipeline on Greek territory, is estimated at 950 million euros (the offshore section, which the parties will finance jointly, at 350 million). At the same time, the EU declared its readiness to bear 40% of the costs.

And now, in order to guarantee investors a return, Brussels has sacrificed its own principles. As an argument, the European Commission cites the thesis that the gas pipeline “will allow Edison, a competitor of Eni, which has overwhelming dominance in the Italian energy market, to compete with the monopolist more effectively, since Edison will now control its own source for gas imports,” and DEPA , not present on the Italian market, will have the chance to increase competition. In addition, the EU expects that the gas pipeline will most likely transport gas from “non-traditional” suppliers, which means that dependence on the main exporters of raw materials to Europe - Russia, Norway and Algeria - will decrease.

First of all, these expectations are related to the supply of Azerbaijani gas through Turkey. As is known, back in the mid-1990s, the State Oil and Gas Company of the Azerbaijan Republic (SOCAR) signed a long-term contract with Botas for the supply of 6.6 billion cubic meters of gas from Shah Deniz. Deliveries will start this year. After increasing gas production to 16 billion cubic meters in 2012, Azerbaijan's export capabilities will make it possible to fill Poseidon.

However, so far no contracts have been signed to load the new gas pipeline. Since it remains to agree on transit with Turkey. And in this matter, intense competition is expected between SOCAR and Gazprom. As is known, the Russian concern should supply 16 billion cubic meters to Turkey via Blue Stream starting from 2010. Not counting the obligations on the existing Trans-Balkan gas pipeline (about another 10 billion cubic meters). And it is not a fact that all this volume will be in demand by Turkish consumers. This means that the opportunity opens up for its transportation further to the Balkans and as a political joke to Israel. The problem is that Ankara sees itself not only as a transit country, but also as a reseller of gas to Europe, or at least a partner in its sale. And they will try to make the most of the contradictions between the two suppliers to obtain additional benefits.

Alexey GRIVACHS