New Eastern Europe: The Revival of South Stream on the Horizon
Russia encourages its allies in the EU to participate in the Turkish Stream project which is aimed at delivering Russian gas to Central Europe. This initiative may be a threat to Ukraine’s position as well as a threat to the Southern Gas Corridor, a key European diversification initiative. Implementation of new Russian plans would be in fact a revival of the abandoned (?) South Stream project. Some European countries are ready to help Russia in the implementation of its business plans, although they might not serve the EU’s interest well.
Hungary, indirectly, by its statements on energy policy, supported the Slavkov Triangle’s (Austria, Czech Republic and Slovakia) stand in the matter of energy cooperation with Russia. These countries see no obstacles in strengthening economic ties with the Kremlin in spite of the Ukrainian war. Viktor Orban recently paid a tribute to Vladimir Putin who visited Budapest on February 17th. Orban has been selling the Hungarian energy sector to Russia step by step. In exchange for lower gas bills and more flexible conditions of the gas deal, he accepted a Russian loan, nuclear deal on building new reactors in the city of Paks by Rosatom and agreed to not export purchased Russian gas to Ukraine. The latter is the most important thing.
Russians now dictate to Orban to whom he can or cannot sell gas which is against the EU law. According to the EU regulations, each state has a full right to sell gas to any other country. Gazprom does not want this to happen because the situation in which its customers trade Russian gas between each other is highly uneconomic for the company which has been recently losing its firm position on the European market. Under current conditions, this solution is more beneficial for gas buyers than to buy gas directly from Gazprom. For example, Ukraine has been purchasing gas from Germany as Germany’s deal with Gazprom had much better conditions than Ukraine’s one. Thus, the Russian gas giant wants to keep a re-export ban clause in all its agreements with European partners even if it is not in accordance with the EU law. Budapest has accepted this clause unilaterally and, by doing so, Orban showed Putin that the Kremlin may influence not only the Hungarian energy sector but also Hungarian politics as a whole.
Read the full article from New Eastern Europe HERE