Gazprom`s Nord Stream-2 project faces new challenges

Thursday, June 9, 2016 - 13:20 (EEST) Section: Latest news

Germany`s Federal Minister for Economic Affairs and Energy Sigmar Gabriel stated there were three conditions for his country to support the Nord Stream-2 gas pipeline project, Russian newspaper Vedomosti reported.
According to Gabriel, the project must meet the requirements of the EU legislation, not threaten the transit of gas from Russia via Ukraine, and not limit supplies to Eastern Europe.
It is not easy to assess the possibility of Russia complying with these conditions because they are too vague and apt to mislead, says senior analyst at Vygon Consulting Maria Belova.
The compliance of the Nord Stream-2 project with the requirements of European legislation is now being analyzed by legal experts at the European Commission, according to Belova.
Gas supplies to Eastern Europe will depend on Germany and countries located to the south, rather than by Gazprom, according to Belova. It is these countries that would need to ensure the required capacities of their gas transportation systems to enable smooth transit of Russian gas to Eastern European consumers through the Nord Stream 2 pipeline.
The most disputed issue concerns gas transit, says Alexander Kurdin, the head of Directorate for Strategic Research in Energy at the Analytical Centre under the Government of Russia. One of the tasks relating the construction of the Nord Stream-2 is to provide backup capacity in the event of termination of [gas] transit via Ukraine after 2019. For this reason, Gazprom is not able to guarantee the maintenance of transportation volumes. Reaching a compromise on other issues is quite possible, especially if the wording of some of the requirements is softened, Kurdin said, according to Vedomosti.
Kurdin notes, the fate of the South Stream project, which was abandoned after the European Commission had taken the corresponding decision, shows that when there is a consolidated position in Brussels, the bilateral agreements may not be taken into account.
The Nord Stream 2 provides for the establishment of a pipeline capacity of 55 billion cubic meters per year. It will run from Russia through the Baltic sea to Germany.