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A Russian Alternative to the European Energy Charter
20 May 2009 10:22 PM
Excerpt from Russian Petroleum Investor by Inna Gaiduk and Elena Kirillova
| The January gas dispute between Russia and Ukraine has shown that, without an increase in responsibility of transit countries, it is impossible to provide guaranteed deliveries of energy resources. It resulted in damage to the interests of both Russia and several consuming countries (See “Russian-Ukrainian Transit Battle Resolved but ‘Gas War’ Far from Over,” Russian Petroleum Investor, February 2009). In spite of the fact that Ukraine was the initiator of the gas dispute, Europe has taken an ambiguous position in deciding not to condemn the Ukrainian actions. |
In addition, Brussels and Kiev have recently signed a declaration for the modernization of the Ukrainian gas transport system (GTS), removing Russia from the process (See “EU and Ukraine Agree without Moscow,” Russian Petroleum Investor, April 2009). Such European behavior obliges Moscow to reflect once again on a diversification of energy deliveries. The visit by deputy prime minister Igor Sechin to China is also a serious signal to Brussels. Russian Prime Minister Vladimir Putin’s decision not to participate in an April conference in Sofia is an additional demonstration of Moscow discontent.
Observers had considered the White Stream gas pipeline project proposed several years ago by Ukrainian Prime Minister Yulia Timoshenko at best an abstract possibility. The plan had called for laying a pipeline on the Black Sea floor to Europe. The idea was to move gas from Azerbaijan and Turkmenistan to Ukraine and then on to Europe. Now, Brussels is beginning to consider the pipeline idea as likely. In addition, under the guise of reconstructing the Ukrainian GTS, Western countries are again attempting to find ways of delivering gas to Europe bypassing Russia by utilizing White Stream.
Given that oil and gas revenues constitute the major part of the Russian budget, the Kremlin is now considering state-sponsored protectionism. Sechin’s trip to China and the signing of the Russian-Chinese agreement is the first stage in the protection of Russian energy interests. The Chinese card means a diversification of deliveries and the creation of an alternative approach to replenishing the budget if Russia cannot manage to agree with European countries. As to Putin’s refusal to visit Sofia, it is in response to the more recent Bulgarian energy initiative --a decision to move from the South Stream project to Nabucco. Brussels has managed to press Bulgaria to decide against signing a binding agreement with Russia on the South Stream. Bulgarian Minister for Foreign Affairs Ivaylo Kalfin declared that his country is not ready to sign an agreement now. According to the Bulgarian mass media, Russia would participate in the Sofia forum only if Bulgaria would allow Gazprom to use the country’s gas infrastructure for South Stream needs. In addition, Moscow demanded a 51 percent stake in the future project, a position Sofia rejected. The Bulgarian authorities have said that it is now more important to construct a nuclear power station and create alternative natural gas deliveries, namely to accelerate realization of the Nabucco project, construct a receiving terminal for gas condensate or even to emphasize liquefied natural gas (LNG). As a result, Egypt and Bulgaria have agreed to construct a transport system that will allow delivery of gas via pipes or tankers in the form of LNG to Europe. This, in the opinion of Sofia, will allow the European Union (EU) to have a reduced dependence on Russia. Read Related Articles
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