The trumpet is not calling

Stream gas project The South is practically dead. Gazprom loses control over the European gas market

Last Tuesday, speaking at a conference in Houston, the head of the Italian oil and gas company ENI, Paolo Scaroni, proposed merging the Nabucco and South Stream gas pipeline projects. The top managers of Gazprom, having learned about this, were furious: until now, ENI has been Gazprom's partner in South Stream and the only true ally in the fight against the anti-Russian Nabucco. Newsweek's interlocutor at Gazprom called Scaroni's act a betrayal.

A public scandal began between ENI and Gazprom. Soon, a source close to Gazprom told RIA Novosti that the Italians were taking an unconstructive position, preventing the French company EdF from joining South Stream, and while Scaroni heads ENI, there would be no progress on the project. For South Stream, which was already not very viable, this scandal could be a death blow. Last Friday, Paolo Scaroni presented the company's strategic plan for the next four years. South Stream is not mentioned at all. True, at this presentation, Scaroni said that there could be no disagreements between him and Gazprom. Nevertheless, the project is doomed - almost no one needs it.

GAS CLUB

South Stream has never been justified from an economic point of view - it is, for example, much more expensive than its competitor Nabucco, which, according to the plan, will be built around Russia. However, Gazprom has always recognized that South Stream, like its northern brother Nord Stream, are projects that are extremely important for Vladimir Putin.

The concept of an energy superpower was formulated in 2005 when Vladimir Putin and German Chancellor Gerhard Schroeder announced the construction of the Nord Stream pipeline from Russia to Germany under the Baltic Sea. Soon a second project appeared - the South Stream pipe to Italy. The European press began to write about the "gas claws" with which Russia is trying to take over Europe. However, it was planned to increase Russia's influence on Europe not only by building new gas pipelines, but also by creating a pool of authoritative politicians loyal to Moscow who would lead Gazprom's new international projects.

First, Gerhard Schroeder himself, when he resigned from the post of chancellor, headed the committee of shareholders of the Nord Stream operator. Jacques Chirac was to follow his example. A source at a major French energy company told Newsweek that Vladimir Putin offered the outgoing French president to head the board of directors of a consortium that is developing the Shtokman gas field. In it, in addition to Gazprom, the French Total and the Norwegian StatoilHydro. Silvio Berlusconi, who lost the parliamentary elections in 2006 and resigned as prime minister, and then his successor Romano Prodi also received an offer to participate in the management of South Stream.

But Schroeder's transition to Nord Stream turned out to be too big a scandal, and these plans collapsed. Berlusconi did not intend to leave politics and evaded the offer. Jacques Chirac seriously thought about the proposal for a long time, the source says. His advisers have come up with several ways to explain why the former French president works for Gazprom. For example, to personally make sure that the environment will not be affected during the development of Shtokman. But in the end, Chirac decided not to risk his reputation.

The idea of ​​the gas club failed, but the projects of Gazprom and Berlusconi, and Chirac's successor Nicolas Sarkozy, continued to be supported. Sarkozy, says a Newsweek source, has tasked French energy companies with entering all key pipeline projects in Europe. With his suggestion, GDF Suez simultaneously began negotiations on joining both the Russian-German Nord Stream and the anti-Russian Nabucco. And another French giant, EdF, is interested in South Stream. However, the negotiations were rather sluggish and have not yet ended in success - they could not refuse the president of the company, but they did not see any economic benefits in ambitious projects, the source of Newsweek admits.

Thanks to the support of the Italian authorities, ENI became Gazprom's partner in the construction of South Stream. However, four years after the launch, it is still in its infancy. Turkey and Bulgaria, two key countries for the gas pipeline, did not agree to the construction, the feasibility study has not been developed, the cost of the project in the press releases of Gazprom ranges from €8 billion to €24 billion.

Nabucco has moved on. All countries participating in the project have ratified the agreement on the construction of the pipe - Turkey was the last to do so on March 4. Nevertheless, Nabucco has no less problems than South Stream. Two weeks ago, at a gas conference in Sofia, Bulgarian Prime Minister Boyko Borisov accused the project participants of supporting Nabucco not in deeds, but in words: "The US and the EU must explain why the project has not yet moved off the ground."

PROTECTION AGAINST RUSSIA

Immediately after the conference in Sofia, the European Union announced a program for financing energy projects for the next 18 months. In total, he plans to spend €2.3 billion. The first line on the list of priorities is Nabucco - he was promised €200 million. However, this money will be allocated only if this gas pipeline has a resource base, a source in the European Commission notes. That is, if Nabucco's shareholder companies come to an agreement with gas suppliers Turkmenistan and Azerbaijan. Nabucco spokesman Christian Dolezal assured Newsweek that these contracts will be signed by the end of this year.

Zoltan Biro, a former adviser to former Hungarian Prime Minister Ferenc Gyurcsany, predicts that the Nabucco lobbyists will not succeed, since it is impossible to build a pipeline through the Caspian Sea to Turkey against the will of Russia.

Nabucco is not the only way the European Union has come up with to defend itself against Russia. The EU will allocate another €80 million for the construction of a terminal for receiving liquefied natural gas (LNG) in Poland. In addition to Poland, Croatia is building such a terminal. The EU will give the same amount for the preparation of Eastern European gas pipelines for reverse use - in the opposite direction. This money will be received by Poland, the Czech Republic, Austria, Lithuania, Latvia, Hungary, Slovakia and Romania. Now gas flows through these countries only from east to west. If it goes in the opposite direction, Eastern Europe will no longer depend on Russian gas, but will be able to receive liquefied gas from Qatar, Norway, Algeria or Trinidad and Tobago.

The head of East European Gas Analysis, Mikhail Korchemkin, says that in the future this may be fraught for Russia with the loss of not only the Eastern European market, but even Ukraine, the largest consumer of Russian gas.

SHALE REVOLUTION

The volume of liquefied gas in the European market will grow at a tremendous pace in the near future. This is due to the shale revolution that took place in the US last year. The production of shale gas increased sharply there, and the United States took the world's first place in gas production from Russia - 745.3 billion m³ against 582.9 billion m³.

Duma Vice Speaker, President of the Russian Gas Society Valery Yazev admits that shale gas could completely change the European gas market in the future. On the one hand, shale gas production is expensive, so it is profitable to consume it only at the place of production. But the United States will be able to refuse imports of liquefied gas in the coming years, Yazev admits. This means that all volumes unclaimed by the Americans will be redirected to Europe.

Due to the crisis, spot, that is, exchange prices for gas in Europe are now 25% lower than prices in long-term contracts with Gazprom. This fact has already led to a revolt of European energy companies against Gazprom - they demanded discounts. Last week "Gazprom" went to meet the buyers. Now about 15% of its gas will be sold at spot market prices.

The situation for Gazprom will become even worse, predicts Zoltan Biro, when the Europeans master American technologies and start extracting shale gas themselves. The shale revolution, by the way, has already forced Gazprom to abandon its plans to develop the Shtokman field. At the end of February, it was announced that the development of Shtokman was being delayed for three years. It is not clear, however, who will need Shtokman's expensive gas in three years. According to Biro's forecasts, by this time Europe will start its own production of shale gas.

UNNEEDED CONSORTIUM

Valery Yazev argues that even in this situation, Russia's Nord Stream and South Stream gas pipelines will still be needed by Europe. Due to the decline in gas production in Europe, gas demand will increase by 250 billion m³ within ten years. Mikhail Korchemkin does not agree with him. He believes that American shale gas is already slowing down all commercial pipeline projects, including Nabucco: "But Nord Stream and South Stream are not commercial, only the Russian prime minister can stop them."

Gazprom has never concealed the fact that these gas pipelines are needed to transport gas to Europe bypassing Ukraine. Immediately after the presidential election, Viktor Yanukovych said that he would fight South Stream, and recalled the old idea of ​​creating a consortium: to divide control over Ukraine's gas transmission system (GTS) equally between Russia, Ukraine and the European Union. The consortium would repair Ukrainian pipes and take responsibility for uninterrupted supplies, and Russia could no longer blame Ukraine for being an unreliable transit country.

Yanukovych's proposal was received without enthusiasm by Gazprom. A source in the Ukrainian Foreign Ministry says that Gazprom would prefer to take the Ukrainian GTS for debts. At the same time, Ukraine wants the consortium to increase the capacity of its pipes, while Russia is against it. “I believe that there is no need for new pipes in Ukraine,” Yazev confirms.

Modernizing the Ukrainian GTS is much cheaper than building South Stream. Zoltan Biro believes that Russia will soon abandon this project, and the quarrel with ENI is the first step in this direction. However, a source in Gazprom does not believe in such a development of events, even if South Stream loses its economic sense. And the point is not even in the will of Prime Minister Putin, but in the fact that a fairly strong lobby of Gazprom contractors has developed, which seeks to lay new pipes.

For example, last year, at the height of the crisis, the company made it a priority to build the record-breakingly expensive Sakhalin-Vladivostok gas pipeline. Gazprom has not abandoned plans to build the Bovanenkovo-Ukhta pipeline, although gas from the Bovanenkovo ​​field can be transported through existing pipelines.