Gazprom & Co Pitch Apolitical Gas
Russian and European officials lined up on January 28 to call for an “end to the politicisation of gas” as they delivered keynote speeches at the European Gas Conference in Vienna.
In opening remarks, Manfred Leitner, a board member at Austria’s OMV demanded Europe “concentrate on the facts”. As was stressed by the Russian speakers that followed him, Leitner stated simply that “European gas production is dropping. We need to import more gas; however we can.”
Having spent the previous day locked in talks with Leitner, Viktor Zubkov, chairman of Russian state-controlled giant Gazprom, then picked up the baton. Flows from the Middle East and North Africa are not growing, he claimed, and Asian markets will remain the preferred destination for LNG. That’s why Gazprom exported over 200bn m3 to Europe and Turkey for the first time last year, he suggested.
“Russia will maintain its role as the main supplier to Europe,” stated Elena Burmistrova, director general of Gazprom Export, “and be a reliable partner. We set new records this winter.” She said January flows were raised particularly in central and eastern Europe - the crucible of concerns over Russian domination of supply ever since the region was hit by the “gas wars” of 2006 and 2009 that cut flows through Ukraine.
Like Zubkov, Burmistrova sought to push European buttons by stressing that Gazprom’s ongoing projects will help boost security of supply and cut emissions. “By the end of this year the first gas will arrive via Turkish stream, allowing Gazprom to improve the security of supply to southeastern Europe,” she said. “Approximately 20% of Nord Stream 2 is laid,” she added. “This will allow us to support the EU’s switch to a more environmentally friendly energy sector."
Michael Losch of the Austrian government was also prepared to give the more controversial of the Russian projects a name check: “Alongside BRUA and LNG flows, Nord Stream 2 will offer us good diversification that will give long term security of supply,” he asserted.
With NS2 progressing on the ground - or rather under the Baltic Sea - discussion at the conference showed that the gas industry is starting to focus on EU efforts to amend energy regulations that could curtail NS2’s operation.
“We believe intensive growth in international trade will require all participants to abide by equal rules as far as risk taking and creating investment rules are concerned,” said Zubkov in a rare reference to the problems surrounding Russia’s pipeline diversification projects.
However, in general the Russian delegates were clearly keen to appear unruffled by the sustained opposition to NS2 that Washington, Poland, Ukraine and the Baltic States generate so effortlessly. They bid instead to present Gazprom as a patient and respectful partner, ready to work together - whenever Europe is ready to face reality.
That left it to Leitner to put the boot in. "There is no alternative,” the Austrian stated bluntly. “We need Nord Stream 2 and other projects to fill an import gap that will grow to 150bn m3. I’m not convinced that all European Union member states are acting according to EU interests, but rather in national political and economic interests. We can say the same about Ukraine!”
Florian Ermacora of the European Commission’s electricity and gas unit took up the OMV chief’s challenge, while sticking to Brussels’ line that it is not playing politics but simply applying the rule of law. “We agree with Mr Leitner that Nord Stream 2 negotiations should not be held at a national level. That’s music to our ears,” he told the audience. “These sorts of projects can’t be regulated at a national level. They need to follow European law principles. We do not say we don’t want Nord stream 2, and from one point of view we agree the issue is over-politicised. At the end of the day, it’s just about regulations."