Russia uses South Stream gas pipeline to widen EU division

Plans for tougher economic sanctions against Russia are adding to a rift among European Union countries at the same time as there is division over Russia’s South Stream gas pipeline project, says GIS consultant Dr Frank Umbach, Senior Associate at the Centre for European Security Strategies (CESS) GmbH, Munich, Germany.

Some EU-member states and their national corporate energy champions have sided with Moscow over the pipeline dispute when the EU’s authority and common political will is already being questioned by internal disagreement over sanctions.

‘It is no coincidence that countries backing the South Stream project - Austria, Bulgaria, Italy and Hungary - are also opposing harsher sanctions,’ he says. ‘These countries do not want to risk their energy and trade ties with Russia. They prefer bilateral relations with Moscow at the expense of common EU energy security policies.’

Bulgaria has annual gas consumption of 3 billion m³, but is almost entirely dependent on Gazprom gas supplies. Russia’s bilateral relationship is such that it was able to directly influence Bulgaria’s energy legislation in Bulgaria.

Hungary’s Prime Minister Viktor Orban has said that Russia’s South Stream pipeline is ‘a must’ for Hungary. The government does not want to rely on the outcome of the Ukraine crisis to decide its course of action.

Rome, which currently holds the EU’s six-months presidency, has emerged as the biggest obstacle to imposing harsher sanctions on Russia after Moscow intensified its pressure and leverage on Italy as Russia’s second-largest EU trading partner.

Austria is a key natural gas hub in Europe. Half its natural gas imports arrive from Russia via Ukraine and Slovakia, and are transported to Italy, France, Hungary, Germany, Slovenia and Croatia. A third of all Russian gas exports to Western Europe pass through the Austrian gas hub in Baumgarten, which explains its close energy dependence on Russia and its major importance to Gazprom and the Kremlin.

‘Disregard of the common policies has prompted Poland to demand the direct involvement of the European Commission in all inter-governmental agreements and negotiations to ensure EU law is followed,’ says Dr Umbach.

‘The EU is again standing at another strategic crossroads to live up to its long-term defined common strategic energy security interests.’

Adapted from a Geopolitical Information Service GIS press release by Hannah Priestley-Eaton

Read the article online at: https://www.worldpipelines.com/business-news/19082014/russia-uses-south-stream-gas-pipeline-to-widen-eu-division/