Polish ex-PM Launches Last-Ditch Nord Stream Attack
Former Polish prime minister and current EU Council president Donald Tusk has reportedly written to the president of the European Commission (EC) Jean-Claude Juncker requesting that the executive body of the European Union block the planned Nord Stream 2 pipeline.
However the EC, being an institution based on law, cannot block or advance decisions based on preferences, a spokesman for Juncker has reportedly replied.
The EU is divided on the matter of Nord Stream 2, with west European countries generally being in favour and former Soviet satellite states generally being opposed to it. The EC is expected to tell governments soon that EU energy and competition rules do not apply to it.
Extracts from Tusk's letter seen by the UK press appear to reiterate the views expressed in a letter sent in March 2016, signed by senior government officials in eight EU member states in central and eastern Europe: namely that it strengthens Russia's grip on gas supply.
Speaking at an energy security conference in Monaco June 2 organised by Adam Smith Conferences and Ukrainian producer Burisma, a former EU energy commissioner and now leader of Latvia's Unity Party Andris Piebalgs said Nord Stream 2 was a purely political project. "It has nothing to do with the market, it is political and creates headaches, as demand will not grow and there is already a pipeline system," he said.
On the other side, it is argued that Gazprom and its partners are spending their own money on this project and that as the seller, Gazprom is uniquely qualified to decide which route to use for delivering its gas.
European Council president Donald Tusk (Photo credit: Tusk's Twitter page)
Nord Stream 1 already carries gas from Russia under the Baltic Sea to northeast Germany; Nord Stream 2 would follow the route, bringing the capacity to 55bn m³/yr, and flow mostly from there southwards into central Europe, rather than northwest Europe, where gas production is either at plateau, in the case of Norway, or generally declining, in the case of the UK and Netherlands.
Analysis of bookings on the cross-border capacity platform Prisma show that Gazprom is the sole booker of Eugal, a pipeline that will if built largely follow the existing Opal and terminate at Baumgarten after a brief trip through Slovakia.
Not all the countries through whose waters the pipeline passes have given the line the go-ahead on environmental grounds, but as the first line was cleared, the second line is expected also to satisfy the respective authorities. The bed of the Baltic Sea is littered with historical wrecks and possibly still live munitions.
Russia's biggest transit country is Ukraine, whose pro-EU leanings have angered the Kremlin. The war in the east of the country and the reclaiming of Crimea have destabilised Kiev. After 2019, when Nord Stream 2 is expected to start up, state-owned Gazprom has said it will retain enough compressors in Russia to pump just 15bn-20bn m³/yr through Ukraine, depriving Ukraine of transit fees. Ukraine wants Russia to continue to use its system, despite the military tensions. At the moment Gazprom has a ship-or-pay contract for 50bn m³/yr with Naftogaz Ukrainy, matched by one in Slovakia with Eustream, the latter expiring in 2028. The former contract is being disputed by the two parties in the Stockholm arbitration tribunal.
Poland has led the EU challenge to Nord Stream 2. Late last year the German branch of the state-run company PGNiG successfully blocked an EC decision to allow Gazprom to use more of Opal, and while the courts are determining the legality of the decision, Opal – and hence Nord Stream 1 – have been running well below capacity since the start of February.
Polish state gas company PGNiG also aired its extensive objections to the Gazprom settlement proposal, beefing up the demands to be made of Gazprom, including that Gazprom be fined for its long-term violation of EU anti-trust laws.
And almost a year ago, it was the Polish anti-trust authority that asked questions about the planned joint venture to finance and build Nord Stream 2 that led the six companies that would have formed it – Gazprom, Shell, OMV, Engie, Uniper and BASF – to find another structure to carry out the plan, which they did not announce until late April.
William Powell