Two Lines of “South Stream”

By Tatyana Stanovaya

Longstanding confrontation between Russia and the European Union may end with the uniting of the Nabucco and South Stream gas pipelinesThe idea of possible uniting of two competing pipeline projects – “South Stream” and Nabucco – has been presented again: this was stated by the US Ambassador to Italy David Torn during the interview for Italian newspaper La Stampa. Earlier it was announced by the managers of Italian ENI. Russia treats the kind of prospect more than skeptic, although one shouldn’t ignore that in reality there is no absolute consensus on this issue inside the tandem.

As Torn claimed, the longstanding pipeline confrontation between Russia and the European Union can result into uniting gas pipelines Nabucco and “South Stream”. He proved that this point of view is supported by Italian company ENI – main partner of Russia in Europe within the construction of the “South Stream” pipeline. ENI company changed its line, presenting the support of the uniting of “South Stream” and Nabucco projects, - declared Torn, referring to the dozens of meetings with the Head of ENI Paolo Scaroni. – I would say that at the moment we are at the stage of a constructive dialogue”.

Indeed, for the first time the possibility of the two projects uniting was announced by Scaroni last March. By this the declaration sounded on the background of pretty complicated relations of Italian company with Russian gas monopolist. For example, they hardly managed to agree on entering into the “South Stream” project of French company Electricite de Francе (EdF), and Russian anonymous sources told, that “till Scaroni goes, the situation would hardly change. The line of Italians is not constructive”. The contract of Scaroni expires in 2011.

> South Stream On The Map Of Europe
> Specifications of the South Stream Project
> Nabucco Pipeline Map
Scaroni idea to construct one pipeline instead of two was initially tackled in Moscow. According to the ENI Head, the uniting of the two projects will help to reduce operative expenses and increase the performance. He thinks that on the background of growing gas demand Europe should increase investments into the infrastructure to promote gas supplies from “New sources” – the kind of states as Turkmenistan, Kazakhstan, and from African continent. “We should have single strategy” – he said last March. According to his plan, several lines should supply gas to the main artery going to Europe. “If partners manage to agree to unite the pipelines on a definite part of the way, we’ll reduce the level of demanded investments and operation expenses, but we’ll enhance general profit”, - Scaroni stated. ENI has begun participating in the pipeline project that will connect Europe with Iraq. Exactly Iraq is observed as a possible resource basis for Nabucco.

Almost immediately Italians gained the USA ally, which politicize the problem in the eyes of Moscow to a significant extent. Special Representative of the USA on Energy Richard Morningstar, during the meeting with the ENI Head in Rome, declared that Washington is involved into this idea, and is ready to support it. Great interest of the EU to the suggestions of Scaroni was proved also by the source of the newspaper in the European Commission. And now the idea of unification is announced by the US Ambassador in Italy.

Last spring Russia treated the comments of Scaroni with great scepsis. Energy Minister claimed, that Russia doesn’t intend to unite its gas pipeline project South Stream  with potential European rival Nabucco. The final choice in the benefit of South Stream, according to Sergey Shmatko, the consumers will do when the European Commission grants it the status of priority European project, that will make the EU financing available. Now the Chairman of the Board of Directors of OAO “Gazprom” Alexey Miller proved the line of Russia supporting the self-sufficient project “South Stream”. “Gazprom” is not against the Nabucco gas pipeline, but its filling is the problem of Europeans, stated the Head of the Group of Companies Alexey Miller during the interview published in the German magazine Spiegel on January 10th. “We don’t oppose Nabucco”, - he underlined. – If Europeans want Nabucco, they shall construct it. We are not against, it is their problem. Our task is to fulfill our Contract liabilities on gas supply to our consumers”. According to him, “with annual 63 billion cubic meters of gas for the “South Stream”, we do not compete with anybody”. By this Miller noted, that “Gazprom” doesn’t consider as a problem if any participant of Nabucco wishes to participate in “South Stream” simultaneously.

By this we can’t omit that there is no unanimity of views on possible variants of the situation development about “South Stream” in Russia. It’s indicative that the President of Russian gas community, known as one of the most influencing lobbyists of “Gazprom”, Valerij Yazev called the idea of Scaroni “discreet”. Against the project there is an idea of Ukrainian President Viktor Yanukovych to establish International consortium for the modernization of GTSs of Ukraine (and for that Kiev asks to refuse of the “South Stream”) – earlier Moscow actively promoted this variant, before planning the construction of new lines. That is why, we can’t omit, that first of all the ambiguity of views inside Russian elite towards the idea of Italians will reinforce. And secondly, the development of relations with Ukraine and “restart” with the USA will at least ease the line of Moscow.
Translated by EuroDialogueXXI from politcom.ru