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17th Nov 2018

Eastern EU leaders to warn Juncker on Nord Stream II

  • The Nord Stream II consortium is forging ahead on construction despite the EU's dispute with Russia on Ukraine (Photo: nord-stream.com)

Nine eastern EU states are preparing to warn the European Commission that a new Russia-Germany gas pipeline could have “destabilising geopolitical consequences”.

They said in a draft letter to commission president Jean-Claude Juncker, seen by EUobserver, that the Nord Stream II project could “pose certain risks for energy security” in their region.

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  • Sikorski compared the first Nord Stream pipeline to a Nazi-Soviet pact (Photo: nordstream.com)

They said it would “increase dependence” on Russia in violation of previous EU commitments to diversify sources.

They urged Juncker to make sure the deal was “carefully investigated” in terms of compliance with EU energy market laws, and “environmental as well as state aid and public procurement rules”.

The letter has so far been signed by the prime ministers of the Czech Republic, Croatia, Estonia, Hungary, Latvia, Poland, Romania and Slovakia and by the president of Lithuania.

EU sources said it would be handed to Juncker either on Friday or next week, following the EU summit devoted to the migration crisis.

The draft letter said the Nord Stream II issue was of “crucial importance” for the signatory countries.

The existing Nord Stream pipeline, which runs under the Baltic Sea, can transport enough gas to supply 26 million households.

Berlin and Moscow plan to double the volume with Nord Stream II, which is scheduled to start operations in 2019.

The new pipe is being built by a consortium of Russian, Austrian, British, Dutch and German firms, with Russia’s Gazprom holding a majority 50 percent stake.

The consortium website said it would “add flexibility and safeguard Europe’s long-term energy security”.

It added that the first Nord Stream pipeline was “now a milestone in the long-standing energy partnership between Russia and the EU”.

Undermining sanctions

The leaders’ statement on “geopolitical consequences” refers to fears that Nord Stream II would enable Russia to cut off clients in central Europe while maintaining gas flows to core EU states.

Russia has a track record of using energy supplies as an instrument of political pressure.

In 2006, former Polish defence minister Radek Sikorski compared the first Nord Stream pipeline with the 1939 Molotov-Ribbentrop pact between Nazi Germany and the Soviet Union to break up Poland.

The “geopolitical” remark also reflects concern that the project undermines the effect of EU sanctions on Russia.

The EU imposed the measures in 2014 to stop Russian aggression in Ukraine.

Cash concerns

But if Nord Stream II is built, it would make Ukraine’s gas pipeline network obsolete, costing it billions of euros a year in lost fees and harming its strategic value.

It would also cost the Czech Republic, Hungary, and Slovakia billions in lost transit fees.

Nord Stream II “would strongly influence gas market development and gas transit patterns in the region, most notably the transit route via Ukraine to central Europe”, the letter said.

The leaders said Juncker should “in particular” pay attention to the EU’s “third energy package”.

The energy laws stipulate that suppliers to the EU, such as Gazprom, must separate or “unbundle” ownership and distribution assets, and non-consortium energy firms must have “third party access” to infrastructure.

The restrictions prompted Russia to abandon a previous project, the South Stream pipeline, which was to be routed under the Black Sea.

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