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30th Jul 2016

Italian EU presidency backs South Stream

  • Bulgaria halted construction of South Stream following Russia's annexation of Crimea (Photo: south-stream-offshore.com)

The Italian EU presidency is in favour of a controversial Russian pipeline, South Stream, which would circumvent Ukraine to bring gas to south-east Europe.

"We think South Stream should go ahead, as it would improve the diversification of gas routes to Europe," Italy's state secretary for EU affairs Sandro Gozi said on Thursday (10 July) during a press event in Brussels.

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He echoed statements made by Italian foreign minister Federica Mogherini who visited Moscow on Wednesday and met with her Russian counterpart.

She said the pipeline was "very important for the energy security of our country, as well as that of the entire European area”, but stressed that the project should comply with EU law.

She also invited Russian leader Vladimir Putin to a meeting of Asian and European leaders in Milan in October.

Russian foreign minister Sergei Lavrov said during that Mogherini press conference that Italy and Russia "confirm our goal on completing the construction project of the South Stream gas pipeline ... and to continue active work in order to remove all issues that may arise, including in regard to the dialogue with the European Commission."

Work on the South Stream pipeline was halted in Bulgaria last month after the EU commission said it was in breach of the bloc's energy and public procurement laws.

Energy commissioner Gunther Oettinger said at the time that the ongoing Ukraine crisis has also made the EU wary of going ahead with the project.

South Stream would deprive Ukraine of transit revenues from the gas pipelines that cross its territory and bring about 80 percent of Russian gas exports to EU countries.

It would also enable it to cut off supplies to Ukraine to exert political pressure, without affecting its EU gas clients.

Michael Gonchar, a former executive at Ukraine’s gas distribution firm, Naftogaz, told EUobserver, that, together with Nord Stream, Russia’s recently-built pipeline to Germany, South Stream would give Moscow “a 100 percent monopoly on shipments of gas to Europe from the east”.

He added that it would make it less likely that the EU will ever build a gas pipeline to the Caspian Sea, the so-called Southern Corridor, to diversify supplies.

Elena Gerebizza from Counterbalance, an umbrella network of NGOs looking at the funding of EU projects, told this website that South Stream has little to do with real supply needs or energy security.

Italy's energy company ENI is involved in the construction of several segments of the pipeline via a subsidiary, she noted.

"There is a big interest from financial markets and other places [in South Stream] that have nothing to do with [EU] energy security," Gerebizza said.

For his part, Ukraine’s ambassador to the EU, Konstantin Yeliseyev, said the Union would be guilty of “double standards” if it pressed ahead with South Stream after signing a strategic trade treaty with Ukraine last month.

He called South Stream a “politically motivated project” and noted that Italy, as the current EU chairman, should take into account the views of EU countries who also oppose the Russian pipeline.

“The EU presidency should not put forward its national position, but the position of the EU as a whole. This project is not supported by all memeber states, so I have to ask the question whether Italy has co-ordinated its point of view with its other EU partners or not,” he said.

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