27th Oct 2016

Putin's pipeline drives wedge between EU and Balkan hopefuls

  • Gazprom is building the offshore segment of South Stream despite the EU objections (Photo:

Macedonia has become the latest Western Balkan country to receive a stark warning on the implications of building Russia’s South Stream gas pipeline for its EU future.

Janez Kopac, the head of the European Energy Community (EEC), said on Thursday (23 October) that Skopje’s South Stream agreement with Moscow is “not in compliance” with EU energy law.

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He noted that as an EEC treaty signatory it has “a legally binding commitment to implement these rules”.

He added, in comments to the Brussels-based news agency, that “Macedonia will have to withdraw from the IGA [the South Stream accord] or renegotiate it if it wants to become a full EU member”.

The EEC is a Vienna-based body which counts the 28 EU states, the Western Balkan EU-aspirants, Moldova, and Ukraine among its members.

South Stream is to carry Russian gas under the Black Sea via Bulgaria and Serbia to the heart of the EU. But potential branch lines are to connect up with Bosnia, Macedonia, and Montenegro.

The EU says its current model - in which Russian firm Gazprom owns at least 51 percent and controls both production and distribution - goes against EU laws designed to stop monopolies from inflating prices.

The EEC’s Kopac spoke after a senior Gazprom executive met with Macedonian energy officials in Skopje earlier the same day.

Both sides voiced confidence the branch line will go ahead as planned.

For its part, the European Commission on 30 September wrote a formal letter to Macedonia to voice disquiet.

“South Stream, as any other major infrastructure project in Europe, may only be developed and operated fully in line with EU law”, an EU official noted.

“Pipelines developed and operated in conflict with EU law endanger the functioning of the internal market”.

The EEC and commission complaints come after similar criticism of Bosnia and Serbia.

“It should be clear from the beginning that Serbia cannot accede to the EU without bringing this [South Stream] agreement into compliance [with EU law]”, Kopac told EUobserver earlier this month.

Russian president Vladmir Putin has said he hopes to make a deal on the situation with EU leaders.

But in the meantime, Gazprom is pressing ahead with construction of the offshore portion of the pipeline despite the dispute.

EU leaders at a summit in Brussels also on Thursday fretted over how to improve the Union’s energy security in view of its gas dependence on Russia and Russia’s war on Ukraine.

Among other provisions, their joint conclusions, published in the small hours of Friday, say the “Southern Gas Corridor” is one of the EU's “critical projects of common interest … to ensure diversification of energy suppliers”.

The southern corridor is a competing scheme to South Stream which aims to bring gas from the Caspian Sea to Europe, bypassing Russia.

In light of Kopac’s forceful statements, the conclusions noted that EU states will “further strengthen the [European] Energy Community, which aims to expand the EU's energy acquis to enlargement and neighbourhood countries, in the light of the EU's security of supply concerns”.

They added that EU countries should use “foreign policy instruments to convey consistent messages related to energy security, in particular to strategic partners”.

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