If the European Union wants to achieve true energy independence, then it should find an opportunity to reduce the part of international merchandise trade, inside of which payments are made in dollars. In September 2018, European Commission President Jean-Claude Juncker called the situation when 80% of EU energy imports (300 billion euros) are paid in dollars, “absurd.”
German Foreign Minister Heiko Maas has put forward a proposal to create its own international payment system for the EU. To do this, European financial institutions will need to strengthen the financial centralization of the EU and create a political partner for the European Central Bank in the form of a pan-European Ministry of Finance.
However, the European Union is now in a phase in which some national governments, primarily southern European countries, are opposed to the further centralization of the EU. The likelihood that a pan-European finance ministry will be created is small. US sanctions against the Nord Stream - 2 have a long-term goal - to oust Gazprom from the European market.
The experts analyzed the prospects for the construction of the Nord Stream - 2 and the Turkish Stream and are trying to answer the question: why Ukraine will remain a gas transit country?
As noted, the United States sharply criticizes the project to build the Nord Stream-2 gas pipeline under the Baltic Sea from Russia to Germany. Washington is able to take additional measures to stop the construction of this highway. The question is: is the United States really capable of stopping this project?
According to experts, it is difficult to assess. It all depends on what measures the United States will take. Until now, there is only the potential likelihood that President Trump will give his consent to the imposition of further sanctions against Nord Stream (the operator of the gas pipeline) and Gazprom. Which of these sanctions will be implemented is currently unknown.
However, there is a problem of participation of German companies in this project. And while it is not clear whether US pressure can force German companies to withdraw from this project. According to some politicians, German firms have already left the project. Now they are not the owners of the “Nord Stream” together with “Gazprom”, but only take financial part in the project. Their contribution is equal to 50% of investment expenses, but it can be paid by Gazprom itself, so that the pressure on German companies in connection with this financing does not damage the project.
The immediate goal of the United States, trying to torpedo the Nord Stream project, is certainly to defend Ukraine. When Nord Stream operates at full capacity, the Ukrainian economy will lose between $ 2 billion and $ 3 billion in transit a year. And the United States wants to support Ukraine economically, so that these transit revenues remain.
But the long-term goal, according to experts, is the complete ousting of Gazprom from the European market, at least an attempt to impede supplies through the Baltic via the Nord Stream - 1 and Nord Stream - 2, so that American liquefied gas, as well as gas from other suppliers from Europe and from all over the world would take the best market position. We are talking about the desire of the United States as a whole to limit Russian influence, since they view Gazprom and energy relations as instruments of the Kremlin. But how realistic is the scenario of supplying American LNG to Europe instead of Russian gas?
According to some experts, from the standpoint of today it is unrealistic. Liquefied gas is more expensive than pipeline gas, primarily from Russia, and it is supplied mainly to Southeast Asia, where gas prices are higher. Of course, this may change in the future, but for now the assumptions that liquefied gas from the United States and other countries will be competitive are purely speculative arguments. For the USA, this is not about this specific economic goal, but about a general signal, a general political action.
It is known that in Germany there are intentions to build a terminal for processing liquefied gas. This is an additional supporting event of the German energy policy and at the same time a sign for the American administration in order to show that Germany is not completely closed to import gas from other countries. It does not matter much, since the volumes of liquefied gas that can come to Europe are incomparable with pipeline supplies.
From the point of view of not only Germany, but also other European consumers, gas from Russia is more significant in terms of volume and more reliable than liquefied gas. The pipelines have been built, and the gas has been flowing through it for decades, at the same time the suppliers of liquefied gas are labile and can send it somewhere else. Therefore, European buyers are still interested in Russian gas. Nord Stream 2 is 55 billion cubic meters of gas per year. But this gas is actually intended for other European countries, Germany itself does not need such additional volumes ... Of course, part of the gas volumes may remain in Germany or be directed to the west - to Holland, France, even to the UK. But above all we are talking about the south direction - this is the Czech Republic, Austria. This gas can be sent to the countries of Southern Europe until gas starts to flow to the “European stream” in Western Europe. Germany in this case is more a distribution center for Russian gas than its final consumer. End users are in different countries of Europe.
The question arises: how much is Europe interested in the “Turkish Stream”? According to experts, at least it should be of interest to Italy. Italy is supplied through Austria, and if the transit through the Turkish onshore gas pipelines decreases, does not disappear completely, but is reduced by half or two-thirds, the country will begin to experience problems. Under these conditions, Italy will be interested in gas supplies through Turkey, Greece, and Albania by sea. However, we are talking about limited quantities.
According to the plan, the first branch of the Turkish Stream is intended to replace gas imports through Ukraine to Turkey. And only in the second branch, with a capacity of approximately 16 billion cubic meters per year, gas can go to Italy. Moreover, its volumes will be less than what Italy is now receiving through Austria. This means that we can assume a further increase in the capacity of the "Turkish stream" - or gas supplies to Italy will go through other countries. Today, European countries are a union with joint gas arteries, so the question of who is supplying whom, is less significant than before.
"Nord Stream - 2" is very much criticized by a number of European countries. How critical is the “Turkish stream” in Europe?
In Europe, the assessment is not critical, as supply volumes are incomparable. The capacity of Nord Stream - 1 and Nord Stream - 2 totals 110 billion cubic meters a year, the two branches of the Turkish Stream - a little more than 30 billion. Secondly, other pipelines go through Turkey to the West. “Turkish Stream” is just one of them. So, through Turkey, gas from Azerbaijan goes to South-Western Europe, in particular to Italy.
The critical attitude towards the Nord Stream is primarily caused by the Ukrainian problem. And secondly, by the fact that the Nord Stream is located in close proximity to other states - Denmark, the Baltic States, Poland, which are critical of Russia.
Interested in this regard is the perspective of Ukraine. If both Nord Stream 2 and the Turkish Stream are launched, how much will Ukraine suffer - and will the transit of Russian gas through Ukraine generally remain?
It is obvious that Ukraine will lose most of the volume of transit gas. Currently it is about 90 billion cubic meters per year. When the Nord Stream - 2 starts working at full capacity and the Turkish Stream is laid, the transit will shrink by at least 50, and maybe 60 billion. But, according to experts, the transit through Ukraine cannot be stopped immediately or stopped in the long term, because the Ukrainian gas pipelines have high reserve capacity. It is in the interests of both Gazprom and Western European consumers to keep these facilities and give Ukraine the opportunity to receive money for the transit of gas. Although in general, the loss of transit revenues will not be a crucial problem for Ukraine.