The war between Russia and USA because of the “Nord stream-2”: who will win

Germany allowed the construction of the gas pipeline “Nord stream-2” on its Maritime and land territory. This is the reason for the beginning of the creation of the Russian pipe against which actively supports Ukraine, Poland, the Baltic States and the USA. However, the blue fuel from Russia to Brussels required for economic reasons. What will be more important for Europe — financial benefits from the Russian draft or the logic of geopolitical confrontation with Moscow?


photo: ru.wikipedia.org

Author of the photo: btr.

Mining Agency Stralsund is considered that the project “Northern stream-2” meets the requirements of German legislation on energopromyshlennogo. Approvals obtained by the operator of the project — the Swiss company Nord Stream 2, for the construction of a gas pipeline of 55 km. Work will be conducted on the shelf of the Baltic sea in German territorial waters and on land near the town of Greifswald, next to which the land will be a section of pipe.

Nord Stream 2 note that to obtain from the German authorities-ahead for the construction of a gas pipeline failed in the “result of extensive planning and public consultation.”The US claims that Moscow used for these purposes all of its lobbying power. The database of the U. S. Senate on lobbying activities shows that only in July–September 2017 a subsidiary of “Gazprom” has spent at least $880 thousand on promoting in Washington the interests of the “Nord stream-2” and possible cancellation associated with its implementation of us sanctions. Similar maneuvers were held among European officials and businessmen.

So whether it was or not, but the efforts led to the logical result — the approval of the gas pipeline on the territory of the German waters of the Baltic sea and at the point of entry to the continent. “This key opens the opportunity to start building the most important section of the “Nord stream-2”, — so described the incident the head of “Gazprom” Alexey Miller.

Meanwhile, a new export route for Russian gas deliveries in the countries of the Old world still remain the staunchest opponents in the face of the Baltic States, Ukraine, Poland and, most importantly, USA that are trying to press Russia on the European natural gas market shale as its raw materials.

Gas needle

Berlin had initially called for the creation of the “Nord stream-2”. Two of the five foreign companies, prominent investors of the pipeline, are German — Uniper and Wintershall. Two major holding company-representative of Germany — E. ON and BASF — have given assurances to the purchase of natural gas supplied through that pipe.

It is logical that the Germans are trying to stake a claim for a place among the implementers of the “Nord stream-2”. Once the pipeline reaches the payback period, the cost of gas for Europe will be reduced. According to the German consulting company Energy Research & Scenarios (EWI), in the case of starting the “Nord stream-2” the EU will need less liquefied natural gas (LNG) from Norway and North Africa that will lead to the fall of prices.

In this regard, Germany’s insistence on expansion of Russian gas supplies to Europe. The incident in December 2017 the accident at gas distribution station in the Austrian city of Baumgarten, where the explosion occurred on one of the pipes has led to reduction of deliveries of blue fuel in Italy, Hungary and Slovakia. The consequence of the disaster was a sharp jump in prices. The UK is literally a matter of hours, the cost of gas for ordinary consumers jumped by 20-25%.

To quickly establish additional supply of LNG to the Europeans failed, while “Gazprom” has immediately declared that will eliminate the fuel shortage. The Russian monopoly it. First, in 2017, our country’s gas production increased by 12% — to 690 billion cubic meters. Second, supply in the Baumgarten gas is of Russian origin. This station is one of the end points, where raw materials from Russia buying European customers.

Accident in Baumgarten reiterated that only Russian projects, criticized by Western ideologues, will allow the Old World to avoid fuel shortages, even in the case of man-made disasters.

The blue fuel from Russia will not only remain competitive in the coming decades, but will continue to give pricing odds hydrocarbons from other producing countries. EWI believes that by 2030 LNG production in the EU will be reduced. Evaluation of the Norwegian petroleum Directorate, the extraction of conventional gas to 2020 will also be reduced. In the presence of the “Nord stream-2” and because of the competition between suppliers of LNG prices for this fuel in 2020 will fall by 4-13%. Savings to end consumers in Europe will amount to 8 billion euros over two to three years.


photo: Ivan Skryplev

The weak point of the Ukrainian pipeline

At the same time, the damage to Ukraine from the commissioning of the “Nord stream-2” is obvious. Even after the reduction of Russian gas supplies via the pipeline system to Europe Square this transit brings Kiev to $2 billion a year. For Ukraine, which in the next five years intends to reduce the national debt by $15 billion annually, the loss of a consistently paying business in the face of Russia will lead to even greater budget deficit.

While the struggle of Kiev with the Russian gas pipeline does not lead to the desired results. Europe realize the uninterrupted operation of the Ukrainian gas transportation system (GTS) requires huge investments.

According to the head of “Naftogaz” Andrey KOBOLEV, the minimum investment in the stable operation of GTS be $200-300 million over five to seven years next year. Is count Mott MacDonald, on the instructions of Kyiv determined the size of the investment for the operation of the system.

The independent experts ‘ assessment exceeds this amount in order to 2019 Ukrainians need to invest in gas pipeline to $2-3 billion a year to ensure that their condition has not led to disaster, as in Baumgarten.

Investment to fill the Treasury of Kiev gather again at the expense of the population. As noted in the government review of the draft financial plan of “Naftogaz”, in 2018, the price of gas for Ukraine may increase by 73%. “If supply disruptions will continue, prices will remain high and the fix will not be possible nothing,” — said principal analyst at Wood Mackenzie Ltd Massimo Di Odoardo.

Wedding Warsaw and Washington

However, in the West at Kiev are allies. First Poland, for which the creation of the “Nord stream-2” also faces financial losses. In early January, the Polish Prime Minister Mateusz Morawiecki attempted to prohibit the construction of the pipeline. He got a meeting with U. S. Secretary of state Rex Tillerson and fine opportunities to all European companies involved in gas Alliance.

Tillerson promised to think. It is no secret that American corporations extracting shale gas, are hatching plans expansion in European markets. Poland wants to take advantage of the situation. Its national oil and gas Corporation PGNiG first in the European Union concluded in 2017, a five-year contract for the supply of LNG from the United States. However, this raw material will follow through the terminal in świnoujście, the occupancy of which is only 5 billion cubic meters of gas per year. This transit will not even cover the requests of the Polish capital, not to mention other European buyers.

According to senior analyst of FC “URALSIB” Alexey Kokina, the EU is unlikely to accept the offer of Warsaw, but delay the implementation of the project he can do. “However, projects of this scale, a delay of several months is normal”, — the expert believes.

American shale gas is calculated and the Baltic States. However, each tanker transporting fuel sirenne from the USA, spends at least a month, while fuel prices are much more than Russian raw materials. “While American rates can not be compared with Russian. Thousand cubic meters of LNG to the United States in the autumn and winter costs us $265. The cost of fuel of “Gazprom”, even with the price increase since the beginning of the year, will not exceed $200. Such statistics will push Brussels to a final decision in favor of the implementation of the “Nord stream-2”, — considers the chief of analytical Department UK “BK-Savings” Sergey Suverov.

“The Americans want to enter Europe through the door of Poland. Their moves are dictated exclusively by considerations of a geopolitical nature, and the goal is the convergence with the continued dominance in the energy space of Europe”, — says the Deputy head of the International business school, Gubkin Russian state University of oil and gas. Gubkin Liudmila Studenikina.

A shot of Copenhagen

Now the Russian monopoly is preparing to undergo licensing procedures in Finland, Sweden and Denmark. To get the approval of local authorities more difficult than in Germany. In November 2017 against the Russian project was initiated by Copenhagen, has threatened to ban the construction of “Nord stream-2” in its waters.

However, the Danish Parliament issued a law contrary to international requirements. According to the UN Convention on Maritime law, the limitation on the laying of pipelines is equivalent to the ban on freedom of navigation. In addition, according to the Deputy Director of the national energy security Fund Alexei Grivach, if Denmark will insist on the application of the new legislative article, that “Gazprom” will be able to find an alternative route for laying of the pipe.

The rejection of the “Nord stream-2”, in which European energy companies, according to the Nord Stream CFO Paul Corcoran, only in 2017 has invested more than € 3 billion, will retain the dependence of the Old world, from Ukraine. However, as suggested by Grivach, the European country will choose the economic priority when determining the future of this project and were pushed into the background the political support of Kiev.

Washington “Nord stream-2” hurt to throw Russia into second place among the countries supplying the energy mix of Europe, and strengthened the place of the main supplier of blue fuel to Europe.

There is a Norwegian factor. According to estimates of local gas company Gassco, the share of gas from Norway to 2017, nearly a quarter of the European market of blue fuel. Last year was a record supply of Norwegian gas to the continent and in the UK. The volume of gas from the Kingdom rose by a record 8%.

In the future records are anticipated. A study by the International energy Agency noted that decline in own gas production, Europe is increasingly dependent on imports of natural gas, demand for which will grow there 7 billion cubic meters. The main supplier remains Russia.

The build-up of export capacities of LNG on the Atlantic coast of America and receiving ports in Europe, does not allow us to talk about the American gas as a major factor in the energy balance of the EU. It will not help the Central Asian producers. Therefore, Brussels only hope for fuel out of our country.

Paper for security

Brussels is currently trying to balance on two chairs trying to keep the energy partnership with Russia and confirms the negative attitude to the policy of our country in the international space.

The European Parliament proposed to amend the EU legislation changes in the sphere of regulation of gas supply, which “may be legal collisions”. “The pipelines crossing the EU border will be entirely be subject to different jurisdiction (the European Union and countries outside its membership). In the event of a conflict between EU norms and regulations the other hand, the Commission proposes to enter into a separate agreement with the country from which there is a pipeline”, — is spoken in the report of the European Parliament. “The Directive provides that the rules of the EU internal market will apply to a pipe which is not on the territory of the EU and begins in Russia”, — said Grivach.

Just why would Russia have to obey European law? — asks the analyst. In the event of a conflict, consumers must enter into a separate agreement with the vendor. In other words, Russia will enter into additional negotiations with Europe, “Nord stream-2”, convincing Brussels that supplies of natural gas from our country, it is cheaper and safer to support Ukraine, based on us reliance on LNG and Norwegian gas, which is getting smaller.

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