Baku, Azerbaijan, July 21
By Aygun Badalova - Trend:
The EU does not consider Russia's South Stream gas pipeline as the priority project, because it does not correspond to its supply diversification aims.
"For the EU Commission the South Stream gas pipeline project is not and has never been a priority, because it diversifies route but not supply", a source in the European Commission's Energy Department, who did not want to be identified, told Trend.
"The aim of the EU is diversify its energy suppliers for example by direct gas deliveries from the Caspian Basin via the Southern Gas Corridor," the source said.
The implementation of the South Stream gas pipeline project, which is being promoted by Russia, continues to face difficulties. The European Commission has halted negotiations on this project with Russia. In June the European Commission also asked Bulgaria to suspend works on the South Stream on the grounds that the project breaks EU law.
The source in the European Commission said that South Stream, as any other major infrastructure project in Europe, needs a solid legal and regulatory framework in line with EU legislation in place for its development.
EU Heads of States and Governments made this very clear in the latest EU Council Conclusions: "in view of enhancing the EU's energy security, relevant energy infrastructure investments, including those involving third countries, should be pursued in full respect of all the EU's internal market and competition rules, which must be consistently enforced", the source noted, adding that this is not yet the case for South Stream.
For example the South Stream Intergovernmental Agreements (IGAs) are not in line with the EU acquis and there is no guarantee from the Russian side that the project will fully respect EU legislation, according to the source.
As regards further discussion with the Russian side on South Stream, the source said that since the Russian Federation decided to take the rules of the Third Energy Package to WTO arbitration, it has been decided to suspend activities of a respective Working group also at technical level.
"Indeed, it is inconceivable to discuss with the Russian Federation the application of the EU energy acquis on South Stream if they are simultaneously contesting its compatibility with the WTO rules", the source said.
If an infrastructure project is realized yes/no remains a purely commercial decision by market participants on potential business cases, the source added.
South Stream pipeline will have a capacity of 63 billion cubic meters and run through the Black Sea to the South and Central Europe, bypassing Ukraine, in order to diversify the natural gas export routes. It is expected that the South Stream will deliver first volumes of gas in late 2015. The pipeline will start working at full designed capacity in 2018.
South Stream project's participants include Gazprom (50 percent), Italian Eni (20 percent), Wintershall (15 percent) and the French EDF (15 percent).