South Stream 'start'
riddle By Ron Synovitz and
Rikard Jozwiak
Russia's Gazprom said
construction would begin last week on the
underwater section of its South Stream pipeline,
which will carry natural gas beneath the Black Sea
and into the European Union.
But is this
really the case?
Gazprom CEO Aleksei
Miller announced last month that the final
investment decision for the project had been
reached. Miller attended a groundbreaking ceremony
near the town of Anapa on Russia's Black Sea coast
on December 7.
However, as Jonathan Stern,
head of the Natural Gas Research Program at the
Oxford Institute for Energy Studies notes, Gazprom
hasn't yet ordered pipe or organized the lay barge for
the pipeline and "cannot
start laying the offshore section until 2014 [at
the] earliest".
Moreover, EU officials say
a final route has yet to be submitted to Brussels
and likely won't have final approval for at least
another year.
RFE/RL has also learned that
EU Energy Commissioner Guenther Oettinger declined
an invitation to attend the groundbreaking, citing
previous commitments.
'Never been
communicated' Marlena Holzner, the
spokeswoman for the EU energy commissioner, says
this means that a final investment decision on
South Stream - a phase after all designs and
studies have been completed and official approvals
are in hand - isn't even in sight.
"We
have no concrete information that, indeed, the
final investment decision on South Stream has been
taken already because normally, if you use this
term in a general sense, you would have different
things established before you can say it's a final
investment decision," Holzner says. "And one is
that you have the route.
"To the European
Commission, it has never been communicated that
there is a final route. That means where South
Stream starts, where it ends, and which countries
the exact route goes through. That has not been
done," she continues. "There is no environmental
impact assessment for the whole route. As far as
we can see it, we don't regard this as a final
investment decision." The proposed South
Stream pipeline route, according to Gazprom
Gazprom says
South Stream will pass through Turkish waters to
Bulgaria, then continue on through Serbia,
Hungary, Slovenia, and Austria to tie in with the
distribution network of the multinational Eni in
northern Italy.
Officials in Brussels say
they see South Stream's current status as moving
from the "conceptual design and feasibility" stage
to the "front-end engineering and design" phase.
In the latter phase, EU legislation requires
numerous tasks that need approval from regulators
in each country along the route and from the
European Commission itself.
February
deadline Russia says it has concluded
intergovernmental agreements needed with each EU
country involved, but the European Commission
hasn't yet seen them all.
The deadline for
EU states to submit those documents to Brussels is
February 16, 2013. The commission then has nine
months to assess the agreements and raise its
doubts and concerns.
A detailed plan for
the entire route must be submitted to Brussels,
which also must approve environmental and social
impact studies by national regulators in each EU
country.
A "transboundary assessment" is
also required, with input from EU states adjacent
to the route. All studies require consultations
with the public and authorities in each country
and could take more than a year to complete.
Moreover, the offshore section of the
pipeline entering Bulgaria must undergo an EU
environmental-impact study to ensure it complies
with environmental directives.
Russian-European Chamber of Commerce
President Sergei Shuklin confirmed that the
December 7 ceremony at Anapa would mostly be a
ribbon-cutting affair without underwater
construction activity.
"Yes, yeah, I agree
with that. But it starts," Shuklin said.
"Actually, by this action, Russia showed they are
serious about this project. They are just going to
make it happen. I'm pretty sure... So they will
have the first communications with the European
Commission, with the governments of the countries
participating in this project. So everything will
be concluded [according to EU legislation],
especially [since] Russia just became a member of
the World Trade Organization."
'Let's
just do it our way' So why did Gazprom rush
to make its announcement?
Shuklin
suggested it could be related to a probe launched
in September by the European Commission into
allegations that Gazprom engaged in
anticompetitive practices in Central and Eastern
Europe.
"Russia was actually surprised
with the action related to Gazprom," he said. "And
so probably, one of the reasons was, 'Yeah, let's
just do it our way. We know people from the
countries where we will build the pipe, and at
this point, deal less with the European Union
government.'"
Robert Cutler, a research
fellow at Carleton University's Institute of
European, Russian, and Eurasian Studies in Canada,
maintains that Gazprom's push to announce the
start of construction work on South Stream could
also be related to domestic politics.
"On
live Russian television, [President] Vladimir
Putin gave [Prime Minister] Dmitry Medvedev a
direct order: construction of the pipeline should
begin by the end of 2012," Cutler said. "There's a
certain amount of prestige domestically invested
now in producing some sort of result, even though
physical construction of the pipeline probably was
not in the cards then and certainly is not now.
"If Putin gives this order and Medvedev
says, 'We'll do it,' but it doesn't end up
happening, it raises questions domestically about
their authority within the factions in the Kremlin
and about Gazprom's credibility overall
internationally."
According to Cutler,
another reason is to give the appearance that
South Stream is progressing faster than the
Nabucco pipeline, a rival US-backed project aimed
at reducing Europe's dependence on Russian gas by
linking the Caspian region and the Middle East to
EU markets.
Copyright (c) 2012, RFE/RL
Inc. Reprinted with the permission of Radio Free
Europe/Radio Liberty, 1201 Connecticut Ave NW,
Washington DC 20036.
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