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Gazprom’s partners in Nord Stream 2 mount project promotion

Germans remind Moscow about Ukrainian transit

Gazprom’s partners in Nord Stream 2 mount project promotion

The German press has suddenly become worried about the future of Russian gas transit via the territory of Ukraine: the Handelsblatt newspaper has warned that there is a high risk that the Ukrainian gas transportation system may stop functioning after the commissioning of Nord Stream 2. The concerns were voiced after Russian Energy Minister Alexander Novak gave an interview to the Gazeta.Ru website, in which he mentioned the moral obsolescence of the system and overstated tariffs, and, naturally, urged the Ukrainian authorities to upgrade the pipelines if they wanted to continue pumping Russian gas.

If gas transit via Ukraine stops after the launch of Nord Stream 2, political relations between Russia and European countries will deteriorate, Handelsblatt predicts based on statements of some German politicians.

It looks like a reproach addressed to German Chancellor Angela Merkel because of her open loyalty to the new Russian pipeline: she has repeatedly said that Berlin views Nord Stream 2 as an efficient business project, although adding that implementation of Gazprom’s project on the Baltic Sea should be linked to preserving Russian gas transit via Ukraine.

German Foreign Minister Heiko Maas agrees with the chancellor: in his public speeches, he has repeatedly emphasized the benefits of the pipeline for all European countries involved in the project. In yet another show of support, Czech Industry and Trade Minister Marta Novakova talked earlier this month about the usefulness of the pipeline: it was beneficial for the Czech Republic due to a combination of numerous factors, she said.

The Czech Republic – as well as Germany – is a strategic player in the Russian project, hoping first of all to raise its own status as a transit country and enhance its energy security. As is well known, the European Gas Pipeline Link (EUGAL), which will continue Nord Stream 2 on land, will pass across Germany up to the Czech border.

The sea section of the system is being built in strict compliance with the schedule, which was confirmed during a working meeting between Gazprom’s CEO Alexey Miller and CEO of OMV AG Rainer Seele in Moscow on March 6. A total of 818 km of pipes have been laid in the Baltic Sea by now, it was announced after the meeting.

The parties also discussed other cooperation matters, such as increase of gas exports to Austria. According to preliminary estimates, Gazprom has supplied 3.3 billion cu m of gas to Austria since January 1, which is an increase of almost 33% compared to the same period of last year.

Seele is known for his impartiality in assessing prospects of new routes for Russian gas deliveries to Europe. At the end of February, Frankfurter Allgemeine Zeitung quoted his accusatory statement against opponents of Nord Stream 2, in which he linked the desire of Ukraine and Poland to prevent construction of the pipeline to their own economic interests related to transit fees. After the new system is commissioned, he said, it will put an end to the “Ukrainian monopoly” on Russian gas transit. “From the point of view of the CEO of OMV, from the point of view of competition, I can only welcome the end of Ukraine’s monopoly,” he concluded. At the same time, Ukrainian transit should not be given up completely, he said, because EU plans to use gas to replace nuclear and coal power generation, which means huge gas purchases.

Austrian Chancellor Sebastian Kurz recently announced his country’s intention to develop Nord Stream 2 and increase purchases of Russian gas. On February 20, after talks with US President Donald Trump, he pointed to the difference in the stances of Vienna and Washington with regard to the project. At the meeting, Trump once again criticized the pipeline, while the Austrian leader said his country was interested in secure gas supply. Pipeline gas from Russia is far cheaper than American LPG, he stressed, so Moscow will remain a strategic partner for Vienna. In addition, he said he was interested in expanding opportunities for gas transportation to Europe. “We and the United States simply have different interests here,” Kurz said.

 

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