Unknown future of the "Nord Stream-2"

Unknown future of the "Nord Stream-2"

By D.Rozanov

Kiev asks "Gazprom" and Western companies to agree with him the construction of "Nord Stream-2". This is stated in an address to participants in a project, posted on the website of the Antimonopoly Committee of Ukraine (AMCU).


Project participants shall refrain from any action that could lead to a restriction of competition in Ukraine, said the committee.


"If concerted actions lead or can lead to prevention, elimination or restriction of competition, in accordance with Part 5 of Article 10 of the Law on the Protection of Economic Competition of such concerted action prohibited until the established procedure approval of the Antimonopoly Committee of Ukraine", - stated in circulation. Otherwise, according to Ukrainian law, the creation of such a business entity "is recognized concentration (dominant position on the market)."


Office suggested the participants of the project "North Stream-2", refer to the antimonopoly body of the country with the appropriate application.


In early August, it was reported that the company's partner for the construction of the pipeline "Nord Stream-2» ( «Gazprom», OMV, Shell, Uniper, ENGIE and Wintershall) withdrew submitted to the Polish competition authority UOKiK applied for a joint venture for the project. Earlier, Poland objected to the creation of a joint venture to build a gas pipeline.


Russian gas shipped through the Nord Stream pipeline network would end up in Germany before being transported to the Austrian town of Baumgarten, from where it could be delivered via interconnectors throughout Eastern and Southern Europe.


It is a feasible solution. After Ukraine effectively cut off supplies of Russian gas to Europe in 2009 following a contractual dispute between Gazprom and Ukrainian gas company Naftogaz, the EU passed a regulation that requires member states to build more physical West to East reverse flow capacity to improve the security of supply.


Nord Stream’s four-string network fits well into the EU strategy of reverse flows. Moreover, it really does not matter where exactly Russian gas reaches EU jurisdiction and which entry/exit points are engaged for this purpose.


In the last few years Poland, a vociferous critic of its “dependence” on Gazprom, has been sourcing about 20 percent of gas from its western neighbour – Polish President Andrzej Duda recently cracked a joke that “Germany is Poland’s big brother”.


In reality, it is not Big Brother’s gas but Russian gas, since the physical molecules were supplied to Poland through the “virtual reverse flow” at the German-Polish border at Mallnow.


The divisions within the EU member states in respect to Russia, be it either the automatic prolongation of the sanctions’ war or Nord Stream 2, seem to be deepening, and could lead to an institutionalized schism pitting the Old European nations, which designed and accelerated the construction of the Union, against what one American politician termed “New Europe,” compiled predominantly of Poland and the three Baltic States.


Some industry experts claim that Nord Stream 2 will effectively enhance Europe’s energy security. Friedbert Pflüger, former German state secretary and current director of the European Centre for Energy and Resource Security, claimed in an article in writing in Handelsblatt that it was in the interests of the EU to have more rather than less energy infrastructure, and not to alienate traditional suppliers, given that no one had suggested a verifiable alternative.


Meanwhile, in a metaphorical rebuff to critics, Mario Mehren, CEO of German energy company Wintershall, involved in the Nord Stream 2 project, said:  “Of course we currently have icy relations with Russia, but the gas business is a question of geology rather than geopolitics.”


Whatever the hate rhetoric implies, it is a hard fact of life:  Gazprom’s gas pumped westward through an elaborate network of thousand kilometres long pipelines (it takes a whole week for Siberian blue hydrocarbons to reach the end consumers in Europe) provides energy fodder for industrial purposes, burns in power generation plants to light up electric valves, provide heating and warm homes, and feeds gas ovens to cook meals.


Russian gas can be smeared by certain MEPs as “politically incorrect.” Yet no one can dispute the track record:  It has been constantly consumed by European businesses and households for the last 40 years without sweat or fear.

Shareholders Agreement for the project "North Stream-2" was signed in September 2015 in the framework of the Eastern Economic Forum in Vladivostok. The composition of the new consortium includes «Gazprom», E.ON, Shell, BASF / Wintershall, OMV and Engie.


The agreement involves the construction of two new pipelines are a total annual capacity of 55 billion cubic meters, as well as existing ones, which will be held from the Russian coast under the Baltic Sea to Germany. Construction is due to begin in April 2018. Putting the pipeline into operation is scheduled for the fourth quarter of 2019








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