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22nd Jul 2018

Nord Stream II: The 'elephant' at the EU summit

  • Nord Stream I only uses half its capacity (Photo: www.nord-stream.com)

It will be the “elephant in the room,” when EU leaders meet in Brussels on Thursday (17 December) and Friday, one EU diplomat said of Nord Stream II - Germany and Russia’s € 11 billion plan to double the capacity of their Baltic Sea gas pipeline.

Germany says it will help EU energy security, by allowing Russia to keep supplying EU customers if it has another dispute with transit state Ukraine.

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Its critics, mainly in eastern Europe, say it will: increase dependence on Russia; harm Ukraine, by ripping €2 billion a year from its budget; and violate the spirit of EU sanctions on Russia, which are designed to inflict pain in the energy and banking sectors.

They also note that with Nord Stream I currently operating at just 50 percent, there’s no market logic for expansion.

“The issue collides with sanctions against Russia. It’s bystepping the sanctions,” another EU diplomat said.

A third source said: “It's important not to undermine Ukraine’s energy stability.”

The US has voiced criticism. The issue is becoming so heated that even Italy, usually known as a friend of Russia, has joined the eastern European opposition.

Italian PM Matteo Renzi plans to speak out at the summit. Italian foreign minister, Paolo Gentiloni, said in Brussels on Monday: “We expect the European Commission to apply the same rigour in evaluating the project [Nord Stream II] as in other projects.”

His reference to “rigour” comes after the European Commission, last year, blocked a Russian pipeline to Italy, South Stream, on grounds it fell foul of EU single market law, the so called third energy package.

“It [Nord Stream II] has to comply with rules laid down by the third energy package,” another EU diplomat noted.

The “elephant” isn’t mentioned by name in the draft summit conclusions, seen by EUobserver.

Instead, the draft text says: “Any new infrastructure should entirely comply with the third energy package and other applicable EU legislation as well as with the objectives of the Energy Union, such as reduction of energy dependency and diversification of suppliers, sources, and routes.”

The EU commissioner in charge of energy union, Maros Sefcovic, had earlier said Nord Stream II isn’t good for Europe because it increases dependence on one “source”.

But Miguel Arias Canete, another EU commissioner who does energy, has said it is good because it diversifies “routes.”

“Pipelines for us are a nightmare,” another EU diplomat noted.

“Nabucco failed. South Stream failed. Turkish Stream failed and we have no alternative route there in the south, while we are to double the capacity in the north,” the source said, litsing three defunct EU and Russian pipeline projects.

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