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European diversification efforts

Oil&Gas Materials 28 August 2014 20:55 (UTC +04:00)

Baku, Azerbaijan, Aug.28

By Aygun Badalova - Trend:

The need of the European countries in diversification of its gas supplies has become keen as never. The Ukrainian crisis and the existing possibility of the problems with Russian gas transit to the EU countries forces the EU to activate its diversification efforts.

Almost half of Russian gas transit to the EU passes through Ukrainian territory. In 2013, Russia's gas supplies to the European countries amounted to 161 billion cubic meters, and 86 billion cubic meters of those volumes have been transited through Ukraine, according to Ukrtransgas.

The estimates of Russia's National Energy Security Fund show that in 2013, Slovakia and Slovenia imported 100 percent of its consumed gas from Russia through Ukraine, Bulgaria - 90 percent, Austria, Greece, the Czech Republic and Croatia - more than 50 percent, Italy - more than 40 percent.

The project that may provide the EU countries with additional gas volumes - South Stream - is being blocked by the EU itself. The South Stream gas pipeline project is designed to provide the EU countries with additional 63 billion cubic meters of Russian gas which will run through the Black Sea to the South and Central Europe, bypassing Ukraine.

This route could partly solve Europe's supply problems by providing diversification of its energy sources, as well as eliminating the risks that the Ukrainian crisis may pose for the EU.

However, according to a source in the European Commission, this project does not have a solid legal and regulatory framework in line with EU legislation.

"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", the source in the European Commission told Trend.

At the same time the discussions with Russia on South Stream is ongoing. This project will be one of the main topics during the meeting of the European Energy Commissioner Guenther Oettinger with Russian Energy Minister Alexander Novak to take place in Moscow on August 29.

A range of gas issues, in particular security of gas supply and transit through Ukraine, and secure supply to the EU in the next winter, will be discussed during the meeting, according to the statement of the EU Delegation in Moscow.

The aim of the forthcoming meeting is to prepare the next trilateral gas meeting between the EU, Russia and Ukraine which is expected to take place in September, the source in the European Commission's Energy Department, who did not want to be identified, told Trend.

Aspiration to create competitive environment for the implementation of its priority project - Southern gas corridor - may be behind all those reasons that the EU has for preventing the South Stream's realization.

The Southern Gas Corridor still remains the EU's priority project, which will ensure diversification of gas supply sources and routes for European countries through transportation of Caspian gas to the European markets.

Currently this project seems for the EU as the single right way to solve its gas supply problems. In addition, the gas volumes to be supplied via Southern Gas Corridor will completely set some of the EU's countries free from the dependence on Russian gas.

Giving a green light to the Russia-backed South Stream now would mean for the EU to strengthen its dependence on this country's gas supplies in such difficult and uncertain time. Moreover, procrastinating of the implementation of the South Stream may help to gain some time for the efforts to attract Turkmenistan to the Caspian gas project, whose resources are also so important for the EU's diversification goals.

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