Energy cooperation between Russia and Europe goes back decades to the “gas for pipe” contract

In his appearance at South Stream: the Evolution of a Pipeline, Russian Deputy Energy Minister Anatoly Yanovsky said there were many parallels between Russia and the European Union.

In his speech before a packed room of delegates in Budapest, he recalled, “Forty-four years ago an idea was raised, which was called a ‘gas for pipe’ contract, which was later on called the ‘gas project of the century’. This was how the Soviet Union and the European countries started to cooperate.”

The Deputy Minister noted that in the last few years, the two sides had begun to strengthen cooperation and develop new projects. “We’ve opened up new vistas,” he commented.

“The EU is one of our key trading partners: more than 50% of our trade balance is with the European Union; Russia is also the 3rd largest partner for EU countries.”

Regarding energy issues, he said Russia contributed 27% of the EU’s oil consumption, and 26% of gas. He then. pledged to speak about the prospects for future cooperation.

“Certainly, we need to consider the problems as well,” admitted the Mr. Yanovsky. “In the last 20 years we’ve had differences between the EU and Russia regarding energy policy issues. In the EU more and more uniform rules have been introduced, the infrastructure development and common integration documents published.

“A roadmap has appeared,” he continued, “while in Russia the energy infrastructure has been privatized, and the gas and oil sector has been transformed. We’ve also developed regulatory issues and very important investment projects have been started in relation to gas, for instance the pipeline which crosses Poland, and Nord Stream has been implemented, which has become an important basis for cooperation, especially in the northern part of Europe.”

Deputy Minister Yanovsky contended that South Stream had given a new push to Russia-EU cooperation.

He explained: “We have a consultation council of gas, where both European and EU experts participate. They adopted the so-called ‘roadmap’ this past March. This is a key achievement in our cooperation. Besides the dialogues, it was important that this document be based on very simple principles: primarily, the member states of the European Union and Russian sovereign decisions were enshrined in these documents ‒ it underlined the importance of mutually satisfactory cooperation and adoption of consistent steps and measures.

“We consider this document as a living document – the basic stepping stones for our dialogue,” he explained. “It contains down-to-earth objectives which have been adopted by the parties up to 2050 and we plan to have a pan-European space by then, where markets are very transparent and competitive. These markets need to ensure security of supply for the EU and they will provide the basis for our further cooperation and its development.”

He said the document would be implemented through a constant monitoring process and joint thematic commissions would play an important and integral role in this work.

“Certainly, we cannot say that there have been no problems with our cooperation,” he admitted. “Nevertheless, there are still outstanding issues related to the EU regulations, such as the Third Energy Package. Furthermore, the EU market is very difficult to access for 3rd parties.”

There were also other open issues that were important, said Mr. Yanovsky.

“How can these issues be solved,” he queried, “not only in the gas sector but in related fields? Certainly these problems must be addressed through the common efforts of the parties; none of them will find solutions individually and such solutions need to be put down in international treaties and conventions, which can constitute a basis for cooperation.”

Gas transport projects like South Stream and their respective contracts, he said, should be seen within this spectrum.

He commented: “It is very important to develop the project, not only in compliance with regulations and rules, but large investment projects need to be supported because they constitute a common interest for both parties.”

It was also important, he added, to take into account the cooperation of the EU in Russian energy systems, and common projects needed to be supported in this area as well.

“If we go on with the work of the roadmap, projects will be completed to great success. We intend to integrate Russia into the common energy market, which will be beneficial for the national economy of Russia as well,” explained the Deputy Minister, who said that foreign investment had grown to a great extent lately in Russia, like in the country’s gas fields, where foreign companies were also involved in extraction.

LNG transport projects had been started, he noted, while German and Italian companies were involved in exploration and production, cooperating with Russian partners.

……READ MORE……….

SOURCE: Natural Gas Europe, 2013

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