Gas Scales. What Will Outweigh?

January 13, 2021

We are witnessing how the authoritarian states of the Russian Federation and the People’s Republic of China are trying to destroy the unity of democratic Europe by means of economic expansion. Therefore, the infrastructure projects are used for this purpose. Consequently, it is appropriate to equate “Nord Stream-2” and "Belt and Road Initiative".

If the projects are implemented, the EU security will be unbalanced; as a result, it will affect the interests of the USA. The American government, regardless the party affiliation, is aware of such challenges. Therefore, obviously, after the inauguration of the new President of the United States, the containment policy of JSC “Gazprom” will only enhance. This will be facilitated by the position of Joseph Biden, which he has voiced on several occasions since 2015 during negotiations with the EU leadership and which is generally described as “unprofitable agreement”.

However, NATO partners will lack a clear signal from European partners that the Kremlin’s domestic and foreign policy contradicts the principles of a democratic society. 

Germany takes advantage of absence of a consolidated position of the European Commission. Recently, on January, 7th, 2021 during the meeting of the coalition government of Mecklenburg-Western Pomerania, there was “the Climate Protection fund” established, to purchase materials and other equipment needed to complete the construction of “Nord Stream-2”.

The authors of such a project assume that the Fund’s activities — are a matter of domestic policy, so the centralization of the procurement will protect the companies from sanctions and the gas pipeline will be completed. It is nothing more than a camouflage of logistics support.

Thus, three facts indicate the political involvement of the newly established fund. The first fact — is that the decision was supported by the representatives of CDU and SDP parties, which are loyal to Angela Merkel. The second fact — is that the issues of establishing the fund were being discussed during the anti-crisis meeting, where the main topic of the agenda was the issue of the counteracting of the coronavirus infection. And the third fact is — that statutory capital is more than 60 million Euros, there only 0.3% was contributed by regional authorities and everything else was contributed by the consortium “Nord Stream-2”.

It is obvious that Russia’s allies in Europe are in a hurry regarding completion of the construction of the gas pipeline and, unfortunately, are manipulating environmental issues. Supposedly, while alternative power engineering is underdeveloped, the issue of reducing emissions should be solved by increasing the share of the natural gas, which is to become the basis for the development of “green” generation. Thus, the newly created “supermarket” is the Kremlin’s next step on the gas chessboard, following statements about hydrogen supply through “Nord Stream-2” and the practical actions of the European Energy Security act (PEESCA).

The latter facilitated the exit of the companies from the project, in particular Allseas — the main pipelayer of the project. The Norwegian DNV GL also refused to work on the project, which means that there are considerable complications with the diagnosis, testing and certification of the pipeline.

As of the beginning of 2021, the 150km section remains unfinished, which makes less than 10% of the total length of the pipeline. On the other scale — sanctions that blocked 700 million euros and covered at least 120 companies, including 19 companies from European countries. Of course, time will tell whether democracy of expansion will prevail.

At the same time, the other parts of the European gas front (such as Croatia, Serbia and Italy) should also be closely monitored, which could have a significant impact on overall developments.

Briefly about the new three flanks of confrontation for the European gas market.

  1. On the eve of 2021, the so-called Southern Gas corridor began its operations and Azerbaijan’s Socar delivered the first batch of natural gas from Shah Deniz field to the Italian city of Melendugno, which is situated on the coast of the Adriatic Sea. It is planned to transport at least 10 billion cubic meters of natural gas in the new direction annually in the next 25 years. The largest consumers will be Italy, Greece, Bulgaria and neighboring countries in the Balkan region. Overall, the southern corridor will increase its flexibility by building new jumpers and interconnectors, which will increase the share of the liquefied gas and expand access to the European fuel market from Israel, Cyprus and Egypt. The EastMedPipeline project will contribute to this. Thus, the gates for non-Russian gas will open wider with every year.
  2. Immediately after the New Year, the first tanker (Tristar Ruby) with liquefied gas for customers from Hungary (customer — MFGK) arrived in Croatia (port Omišalj, KRK) from the USA. Strategically, this means that “the North-South gas corridor” mentioned above, started operation and the countries of Central and Eastern Europe have received new routes for the supply of non-Russian fuel.
  3. Simultaneously with the unloading of the first batch of American gas on the island of Krk, the so-called “Balkan Stream” was opened in Siberia, which will allow to supply Russian gas to Serbia, Bosnia and Herzegovina and in future to the consumers in Hungary and Slovakia.

As we can see, the degree of confrontation is growing and the events surrounding “Nord Stream-2” are the only one of the flanks of the struggle for the democratic integrity of European states. A clear distinguishing of EU market regulation and security policies can offset threats.

Maksym Bielawski

Leading Expert, Energy Programmes


Born in 1986 in Zhytomyr oblast

Education:

Zhytomyr State Technological University (2008)

Ph.D in Technical Science (2010)

Ivano-Frankivsk National Technical University of Oil and Gas (2012)

Author of 17 patents and 100 scientific works

Work Experience:

2008 – 2011 — Operator of Gas Infrastructure Units, Controller of Gas Transmission System in Rivne Division of PJSC "Ukrtransgas"

2011 – 2017 — Leading Engineer, Deputy Head of Press-Service, Head of Public Relation Department of PJSC "Ukrtransgas"

2017 – 2018 — HR Director of PJSC "Maine Gas Pipelines of Ukraine", Advisor to the Minister of Energy and Coal Industry of Ukraine

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