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European Commission, Russia argue over South Stream gas pipeline

December 11, 2013, 11:39 UTC+3 European Commission

Russian Prime Minister Dmitry Medvedev on Tuesday held talks with Slovenian Prime Minister Alenka Bratusek over the future of Russia's South Stream gas pipeline

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MOSCOW, December 11. /ITAR-TASS/. Russian Prime Minister Dmitry Medvedev on Tuesday held talks with Slovenian Prime Minister Alenka Bratusek over the future of Russia's South Stream gas pipeline. A week ago, the European Commissioner for Energy Gunther Oettinger offered the countries participating in the project to revise the agreements concluded with Russia so that they conform to Europe's Third Energy Package. The European Commission threatened that otherwise the agreements would not be implemented. In response, the Russian premier actually suggested cancelling the Third Energy Package.

Bulgaria, Slovenia and Hungary through which the main stretch of the South Stream gas pipeline will run, intend to take a consolidated position in defense of the project at a meeting between EU energy ministers in Brussels on Thursday, the Kommersant newspaper wrote in the article titled "Gazprom Finds Allies in Europe." Alenka Bratusek told the newspaper the issue would be discussed at a meeting with Gunther Oettinger on Thursday, and that it would involve all the European countries through which South Stream will run.

Alenka Bratusek underlined that as of the date of signing of the inter-government agreement on South Stream between Slovenia and Russia, the document conformed to EU legislation. Bulgarian Energy Minister Dragomir Stoynev's position voiced on Tuesday practically coincided with Bratusek's. Late in November, Slovenia and Hungary agreed to defend their consolidated position on South Stream before the regulator.

The European Commission, which hitherto had taken a neutral stance on South Stream, unexpectedly announced last week, that the inter-governmental agreements on South Stream signed by six EU members (Slovenia, Bulgaria, Hungary, Austria, Croatia and Greece) and Serbia did not conform to European legislation, the newspaper reminds.

"Europe will get gas, don't doubt it," Medvedev said on Tuesday. In his opinion, Russia has a strong legal position, because international agreements overrule the EU law which has to be regarded as national. At the same time, the premier allowed the possibility of comprise that might have a legal nature or be "at the juncture of law and economy."

Deputy head of the INEI RAN department for oil and gas complex Tatyana Mitrova said lawyers would determine the outcome of the European Commission's struggle against South Stream; Brussels has no other ways to put pressure except a legal action. "Financial assistance within the framework of the European program provided to Bulgaria for example, is smaller compared to the effect for the local economy from the building of the pipeline and payments for gas transit," Mitrova said.

A Kommersant source in diplomatic circles suggested that the EU's position on South Stream was largely explained by the current Lithuanian presidency of the Council of the European Union, as Lithuania had long been in conflict with Gazprom. But starting next January, Greece will take over EU presidency from Lithuania. Greece, a signatory to the inter-governmental agreement on the gas pipeline (a result, the pipeline route did not run through Greece,) is interested in Russian investment.

In response to the criticism of inter-government agreements on South Stream violating the EU's Third Energy Package, Prime minister Dmitry Medvedev, in effect, offered to cancel it, the RBC Daily writes. He said Russia had forwarded proposals to the EU to adjust the document.

Russia suggested lifting restrictions for vertically integrated companies, in the first place for Gazprom, Medvedev's spokeswoman Natalia Timakova told the RBC Daily. This position has been repeatedly voiced at talks with the European Union, she said.

The Third Energy Package says one supplier cannot use more than 50 percent of pipeline capacity, and that the rest has to be auctioned off, the newspaper reminds.

Russian officials and Gazprom managers were not daunted by European Commission's demands. Mikhail Levchenko, director general of Gazprom Invest, said "someone's decision cannot stop such a large project," as he attended the launching of the first gas pumping unit of the starting South Stream booster station last week.

Itar-Tass is not responsible for the material quoted in these press reviews

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