Beyond Business

European Energy : Ending The Russian Addiction

While Russia dominates in the production and distribution of natural gas, the EU is trying to look away from Moscow to diversify in terms of its energy security and be less dependent...

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January 2009. In midwinter Gazprom shut off the pipelines valves that provide gas to the Ukraine because Naftogaz didn’t pay the bill for its gas supply. The problem is that this gas was supposed to be for European countries. Therefore they didn’t receive it. Indeed, much of Western Europe’s gas currently comes from Russia, via a pipeline that crosses Ukraine. This situation raised several questions : Who paid the Ukrainian bill? The EIB ? the IMF? The World Bank ?  The European Commission? According to the Spokesperson of Energy Commissioner, Ferran Taradellas, “not a single euro” was given  to Kiev by the Commission.But even more ... how to be less dependent from Russian gas ?Brussels is trying to figure it out by having a diversification policy. One of the alternatives is the LNG. In South Hook, for example, where the first European terminal for liquefied natural gas is. The coastal location of the terminal enables it to be provided by sea from other countries. The South Hook terminal permits to supply London with energy for a week. A promising solution that has already seduced Italy but which isn’t enough to provide all the gas needed by a country in state of crisis. The other solution is Nabucco, a new pipeline coming from the South. By 2014, it’ll  bring gas to Europe from countries of Central Asia, such as Turkmenistan or Azerbaijan. Bakou and Brussels are currently negociating for gas exportations but nothing has been signed yet, whereas Moscow did it. Gazprom and SOCAR (the State Oil Company of Azerbaijan Republic) have already signed an agreement on Azerbaijani gas purchases. But why does Russia (which has ¼ of the world gas stocks) need to be supplied in gas ? Certainly to provide gas to its new pipeline named South Stream which crosses Europe, following the same way as Nabucco…Moreover, Moscow is developing another pipeline, coming from Northern Europe ! Two new pipelines for the Russian and only one for the European Union, Brussels is still not ready to measure up to the Moscow influence. Moreover, European countries are divided. The Italian company ENI is involved in South Stream project while E.ON and BASF, German groups, invested in Nord Stream, directed by Gerhard Schröder. After being rejected from Nabucco by Turkey, the French company GDF Suez will be part of the Nord Stream consortium and EDF will certainly join South Stream…  A report by Fabien Thelma and Mounia Ben Aïssa.  

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