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Europe agrees to South Stream gas pipeline project

In early December last year, the European Commission unexpectedly said that the intergovernmental agreements on South Stream did not comply with the European legislation

MOSCOW, January 20. /ITAR-TASS World Service/. The European Commission and Russia will bilaterally seek a solution on the South Stream gas pipeline project without revision of the intergovernmental agreements with transit countries, on which European officials had insisted, representatives of the Russian Ministry of Energy and the European Commissioner for Energy Gunther Oettinger told the Vedomosti newspaper.

In early December last year, the European Commission unexpectedly said that the intergovernmental agreements on South Stream did not comply with the European legislation, and should be completely revised, the newspaper recalls. The EC referred to the agreements with Bulgaria, Serbia, Hungary, Slovenia and Croatia. The claims to the agreements were that they did not take into account the requirements of the Third Energy Package (the laws binding on the EU territory), requiring that alternative gas suppliers should be given access to all pipelines and prohibiting the gas supplier to control the pipelines and set tariffs. Russia’s position is as follows: the intergovernmental agreements are based on international law norms and should have a priority over the EU legislation.

Harsh statements of European bureaucrats have failed, moreover, Bulgaria, Hungary and Slovenia came out with a joint stance: the agreements with Russia at the time of their conclusion in 2008-2009 were consistent with EU legislation.

On Friday, Russian Energy Minister Alexander Novak and Oettinger agreed to establish a working group to discuss the legal and technical issues of the project. A revision of the governmental agreements on South Stream is out of the question, the working group’s task is to make South Stream function normally under the EU laws, said RF Deputy Energy Minister Anatoly Yanovsky. The timeframe of the group’s operation has not been determined yet, a spokesman for the European commissioner said, relations between Russia and the European Commission are now constructive.

If the parties fail to agree, South Stream may repeat the fate of the Nord Stream pipeline, the Vedomosti newspaper believes. The OPAL pipeline in Germany is the continuation of Nord Stream, and for about a year Russia’s natural gas monopoly Gazprom has been trying to get from the EU a permission to cancel the Third Energy Package norms for OPAL. Gazprom has applied for retaining 100 percent of OPAL capacity, and assumed the obligation in exchange to put up spare capacities for an auction. The application has not been granted.

The EU countries objectively need South Stream, it improves energy security in the region, the newspaper quotes analyst of Sberbank CIB Valery Nesterov. And the European Commission, he continues, pursues several goals in negotiations with Russia, and the chief among them is to secure access of the “third parties” to the pipeline — Azerbaijani gas in the first place, Nesterov says. Another goal, the expert believes, is to reduce gas prices.


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