Nord Stream 2 would increase dependence of Europe on Russian natural gas

The proposal to increase the capacity of the existing Nord Stream pipeline faces several obstacles.

Russia has been recently trying to push through a project of a new gas pipeline which would help Russia to avoid politically complicated transit through Ukraine. After the failure of the South Stream project, Russia's attention is on the project of the new pipeline going through Turkey, as well as on the possible increase of the capacity of the existing Nord Stream gas pipeline. The Nord Stream was finished in 2012 and it transmits natural gas from Russia to Germany via the Baltic Sea. From Germany, the gas is transmitted to the rest of Europe. The Nord Stream extension would face criticism especially from the states of Central and Eastern Europe that warned against increasing dependence on Russian gas. Signing the shareholders' agreement has brought on a new wave of criticism from the Czech Republic, Poland, Slovakia and Ukraine. The United States also expressed concern over increasing capacity of the Nord Stream, the so-called Nord Stream 2 project. The shareholders' agreement currently exists between Gazprom and several European companies – BASF, Engie, Royal Dutch Shell, OMV and E.ON.

Similarly to other gas pipeline projects proposed by Russia, the Nord Stream 2 would have to be in adherence to European legislation. In practice, that would mean an obligation to give the competition partial access to the pipeline's capacity, which Gazprom refuses to do. Even though the rule does not apply to the Nord Stream, it limits by half the capacity of OPAL gas pipeline which transfers gas to the Czech Republic. As a result, it also limits the usable capacity of the Nord Stream itself. The European Committee stated that it will insist on compliance with the European legislation even in the case of the extension of the Nord Stream. The company's decision to start auctions of natural gas in Europe is worth noting as well because it would make prices across the region less varied than in the past. However, the auctions announced so far concerned only small amounts of gas.

The deal between Gazprom and its partners sparked criticism in the states of Central and Eastern Europe. Ukraine, in particular, is worried about its own energetic security and expressed concern over Gazprom's attention. Although Ukraine still receives Russian natural gas through Slovakia, Russia remains its important supplier. Other states of Central and Eastern Europe are in a similar situation. Criticism was joined by Czech premier Sobotka who, as his counterparts in the region, pointed out the contrast between the official European politics of sanctions and the deal between the Russian and German companies. According to Slovakian premier Fico, the Western European companies betrayed the Eastern Europe. Even the United States expressed concern over possible consequences of the energetic security plan in Central and Eastern Europe. Ukraine also fears losing transit fees that currently bring the state almost 2 billion dollars a year. Poland and Slovakia would lose money as well since the natural gas is transmitted through them.

Russia's intention to deprive Ukraine of its position as a transit country manifested again in Russia's effort to double the capacity of the Nord Stream. Similarly to other gas pipelines proposed by Russia in the last few years, this case causes worry over increasing dependence on Russia as an important natural gas supplier and its subsequent political influence. This is joined by the fear of Central and Eastern Europe for their security if the project should be realised. The question remains whether it is really going to happen, or it will share the South Stream's fate.

About author: Tereza Krásová


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