Energy is currently one of the main mechanisms linking the economy of Russia and the EU countries .
Six EU countries are in "a mess" over the bilateral deals they signed with Russia on the South Stream gas pipeline, with Bulgaria the most desperate to get EU help, European Commission officials told.
The construction of the Serbian leg of the Russia-initiated South Stream gas pipeline, designed to diversify Moscow’s energy supply routes, was launched Sunday as a steel pipe was symbolically welded north of Belgrade.
The Eastern Europe unanimously placed its bet on the South Stream. Plain fact is that the new Europeans chose to protect their national interests in spite of all temptations and threats from Brussels and Washington. Now the South Stream business blueprint is complete and it is entering construction stage. By the end of 2018 the pipeline is planned to reach a transport capacity of 63 billion cubic meters per year – enough gigajoules to supply energy needs of 38 million households. What has encouraged the pro-South Stream choice of Eastern European political elites presuming their frosty relations with Russia? Why did they not resort to broadly advertised alternatives?
The visit of the Russian President in Bulgaria, which was planned on the first decade this month, has been postponed. Nevertheless, it is expected that Vladimir Putin shall visit Sofia right after Turkey. Yet instead of the Head of Russian State Bulgaria shall be visited by “Gazprom” Chairman Alexey Miller who shall proceed with signing of the series of final investment treaties with East European partners of Russia on the “South Stream”.
The Prime Minister of Hungary Viktor Orbán reported that, Hungarian company MOL withdraws from the consortium on NABUCCO gas pipeline construction. According to the estimations of the experts, withdrawal from NABUSSO proves the fact that Hungary is more involved with Russian project “South Stream”. Yet in 2009 ex Prime Minister of Hungary Gyurcsány Ferenc said that Hungary should stand up for the construction of the both pipelines – NABUCCO and “South Stream” - with all its might. However as we see they didn’t manage to preserve this line: current Prime Minister of Hungary Viktor Orbán has made the priority not policy but “simple economic solutions”. “Through the territory of Hungary it is planned to pipe one of the branches of “South Stream” gas pipeline, which directly – along the bottom of the Black Sea should connect Russia with the EU, - comments on the situation “Deutsche Welle”. – This project, which is lobbied by Gazprom, is considered to be the rival of NABUCCO. That is why in Budapest they could consider that it’s more beneficial to promote cooperation with Russia than force the construction of NABUCCO ". But earlier also the Prime Minister of Bulgaria Boyko Borisov during the meeting with the President of the Council of Europe Herman van Rompuy declared that “Bulgaria has no possibility to accomplish NABUCCO project”, although recently Sophia have given this project the status of state priority.
Gazprom Deputy Chairman Alexander Medvedev has said Turkey will give the OK for the South Stream pipeline project, which will transport Russian natural gas to Europe by passing through Turkish territorial waters, by the end of the year.
The balance of powers has started changing expressly. In the middle of September the EU Council approved the mandate of the talks of the EU with Azerbaijan and Turkmenistan on conclusion of legally binding treaty on Transcaspian gas pipeline construction. As Energy Commissioner Günther Oettinger declared, the access of the EU to the pre-Caspian region and Central Asia becomes a key issue from now on. Transcaspian gas pipeline is considered to be a part of NABUCCO gas pipeline which is represented by West as an alternative to the “South Stream”. In this respect Brussels declared that it is ready to get down to the operations on preparing the countries of Caspian region and Transcaucasia to the reality of negotiations, and to start specific talks with Azerbaijan and Turkmenistan. In this respect Iran has reminded: “Development of transport infrastructure in Caspian region, as well as hydrocarbons transportation is the exclusive prerogative of only pre-Caspian states”.
Ukrainian President Viktor Yanukovych has proposed building one more gas pipeline across his country instead of the planned South Stream project bypassing it. Analysts say Russia is unlikely to support the idea because its goal is to minimize transit risks for its gas deliveries to Europe.
As Russian and EU leaders met on 9-10 June in Nizhny Novgorod for the twice-yearly summit, avoiding the risk for another winter gas dispute with Ukraine was likely to be discussed between Brussels and Moscow. It’s no secret that Kiev wants to re-negotiate the terms of the gas formula agreed by Ukraine’s previous administration. However, earlier last week, Russian Prime Minister Vladimir Putin said that Moscow will not change the gas agreement it has with Kiev. The problem for Ukraine is that the deal linked the gas price to the oil market and, based on the current oil price trend, it’s facing a possible price of $500 per 1,000 cubic meters in the fourth quarter, said Chris Weafer, chief strategist at Moscow’s Uralsib bank. The first quarter average price was $264.30.