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Russia not to abandon South Stream

September 15, 2011, 12:27 UTC+3
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MOSCOW, September 15 (Itar-Tass) — Kommersant writes about the problems that Gazprom’s South Stream project could be facing in the short run. The signing of a shareholder agreement with the project participants – Italy’s ENI, France’s EDF and Germany’s Wintershall – on their entry into the project and guarantees of its launch that is scheduled for September 16 created the news topic.

The newspaper notes that it will be a legally binding document - in contrast to all that have been signed within the project so far. The agreement will be signed in the presence of RF Prime Minister Vladimir Putin. However, the newspaper notes, in the run-up to the appearance of a key document on South Stream, European authorities, which have long been trying to fight the monopoly of Gazprom and are implementing a competing pipeline project Nabucco, have begun to exert unprecedented pressure on the participants in the Russian project.

In particular, the publication writes about a statement EU Energy Commissioner Gunther Oettinger made in Cologne. He assessed South Stream as an attempt by the Russians to prevent the Southern Corridor project, i.e. natural gas delivery to Europe on a route bypassing Russia: from Turkmenistan on the Caspian seabed to Azerbaijan and then through Turkey with the use of the Trans-Caspian pipeline and Nabucco gas pipeline. Gunther Oettinger warned Russia: if it really believes that South Stream “or any other political pressure on Ashgabat and Baku” will make Europe abandon the Trans-Caspian gas pipeline or Nabucco pipeline, “personally I will have less confidence in long-term gas contracts and will less believe that gas is not a political tool.”

It is not for the first time that the Russian side listens to Gunther Oettinger’s harsh rebuffs, but in Cologne he resorted to what Europe has never done before – exerting an open pressure not only on Gazprom, but also on its European partners in South Stream. The fact that such statements are made by the European commissioner are unpleasant for Moscow also because it is the European Commission that has recently begun to claim the status of the chief negotiator with Russia on the gas import terms, as well as with other countries on the creation of the Southern Corridor.

“They make it clear to us that the Trans-Caspian gas pipeline will appear in any case, and to build South Stream or not in these conditions – it’s up to us,” Rusenergy head Mikhail Krutikhin comments on the situation. “It is only polemics so far, but the risk that South Stream will be frozen or incompletely loaded because of Europe’s strong desire to launch an alternative pipe persists.”

On the other hand, Krutikhin says, giving up of South Stream with the launch of the Southern Corridor will mean for Russia increased dependence on gas transit through Ukraine, and if “today Moscow dictates to Kiev, then the situation will change to exactly the opposite.”

However, head of East European Gas Analysis Mikhail Korchemkin notes that Moscow will not give up South Stream, despite the fact that it is very costly and economically not very advantageous for Gazprom, because it would mean losing face for the Russian side.

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