Translated material
Weak energy of dialogue
For ten years, Russia and the EU have become entangled in “flows” and “corridors”
In October 2000, at the Russian-European summit in Paris, European Commission President Romano Prodi proposed that newly elected Russian President Vladimir Putin create a mechanism for discussing cooperation, coordinating interests and preparing joint projects in the energy sector. Over the past 10 years, Russia has managed to build two new export gas pipelines - Blue Stream and Yamal-Europe with a capacity of about 50 billion cubic meters and launched the construction of Nord Stream with a throughput capacity of 55 billion cubic meters (should reach the design level work in two years). But Brussels still does not believe in Gazprom’s intentions to reliably and predictably supply EU countries with gas.To a large extent, this is due to the lack of success in the energy dialogue. Of the specific positive results, the parties noted only the approval last year of an early warning mechanism for possible gas crises, which was adopted after the next Russian-Ukrainian transit war. But “notes of mistrust,” as the head of the Ministry of Energy Sergei Shmatko said, still creep through relations between Russia and the EU in the energy sector. Although in fact, the atmosphere of mutual distrust is perhaps the main result of discussions and actions in recent years. And this is precisely the obstacle that Moscow and Brussels urgently need to overcome.
The Russian side is already taking steps towards it. At least in words, a strong desire to negotiate with the European Commission is demonstrated. This was noticeable in the statements of high-ranking officials and top managers of Gazprom even before the anniversary conference, which took place in the capital of united Europe on November 22. The trend was confirmed by its results - Mr. Shmatko did not criticize European energy policy, but emphasized the need to more intensively discuss possible problems and minimize the negative consequences of decisions already taken and those still being prepared.
Brussels' position on this matter has not yet been clearly formulated. On the one hand, European Commissioner for Energy Günther Oettinger invited Russian experts to participate not only in the development of the EU “road map” in the field of energy supply until 2050, but also in the preparation and assessment of the mechanisms for the functioning of the rules of the “third energy package”, which will come into force in March 2011 year. On the other hand, the European Commission immediately approves as key priorities in the development of gas infrastructure for the next decade such projects as the “Southern Corridor” (delivery of Caspian gas bypassing Russia) and the construction of gas pipelines for the integration of the former Soviet Baltic republics into the European gas supply system (now they are 100% dependent on Russia).
If the European Commission obtains from its member states a new expansion of its powers in the field of energy policy, then only projects within the framework of these priorities will be able to count on maximum favored nation treatment, accelerated permitting procedures and even funding from the EU budget. And the request for such powers is contained, in particular, in the new European energy strategy until 2020, proposed by Commissioner Günther Oettinger. It is planned to discuss its adoption at the level of European heads of state in February next year, after which Brussels will be able to begin work on specific projects with renewed vigor.
Moscow has already experienced how difficult it is to develop gas infrastructure without explicit political support from Brussels through the example of the Nord Stream project, which, even having the status of a trans-European network (TEN), did not enjoy any privileges. The European financial institutions (EBRD and European Investment Bank) refused any, even nominal, participation in the project, although this would have made it easier for the operating company to work with commercial creditors. The process of issuing permits for the construction of a gas pipeline under the Baltic Sea was not accompanied by any public support from Brussels - in contrast to the much more problematic Nabucco project (part of the Southern Corridor), where the European Commission puts pressure on the participating countries, cajoles suppliers, and a declaration of intent to provide financing from the EBRD and the EIB was organized. Until recently, Brussels simply ignored South Stream, a Russian project competing with Nabucco. All attempts by Moscow to achieve European status for it are in vain. Moreover, using the example of Bulgaria, whose intergovernmental agreement on South Stream was demanded by Brussels to be brought into line with European legislation on free access of third parties to infrastructure, the European Commission shows that instead of support, Gazprom here may receive an actual “ban” on investments . After all, everyone understands that not a single large gas transportation project can be implemented on the terms of free access - commercial lenders simply will not give money without a contract guaranteeing the loading of the pipe at least for the period of loan repayment, and investors will not invest without guarantees of payback (and they can also only be provided by an agreement with the supplier).
In this coordinate system, the place for cooperation with Russia is outside the top three. Of course, the Europeans are well aware that Russian gas supplies will remain the largest part of the EU's gas balance. But at the same time, realizing that the EU countries continue to deplete reserves and their own production, Brussels is betting on increasing gas supplies from other sources according to the principle “if only not from Russia.” And this is the main sign of mistrust, for which you will have to pay. It was not for nothing that Russian Energy Minister Sergei Shmatko noted at the anniversary conference that almost any diversification in the gas sector is associated with such a “side effect” as significant additional costs for infrastructure, which are ultimately passed on to consumers.
However, Moscow, which is promoting and implementing new gas transportation projects for supplies to Europe precisely under the slogan of diversifying transit routes, is not too bothered by this “side effect.” The construction of Blue Stream to Turkey (excluding the expansion of the pipeline system in Russian and Turkish territories) cost $3.3 billion, the Polish section of Yamal-Europe alone cost more than $2 billion, and Nord Stream (only marine part) it is planned to spend about 9 billion euros and South Stream is estimated at up to 10 billion euros. But the feeling of reduced dependence on Ukraine, which in the 1990s provided over 90% of the transit of Russian gas to non-CIS countries (and if all “flows” are introduced, will revert to secondary roles), is apparently more valuable to the Russian leadership than money.