Financial Times FT.com

Russia-EU energy

Published: January 14 2009 09:26 | Last updated: January 14 2009 17:17

By letting its Russian gas dispute drag on for two weeks, Ukraine has discharged a double-barrelled shotgun into its nether regions. Russia and the European Union have forceful incentives to back pipeline routes skirting round it, reducing transit fees that earn Ukraine $2bn a year. Russia’s reputation is further tarnished, too. Even so, three years after the first Ukraine gas shut-off, the EU has made limited progress in diversifying energy sources. Today’s talk is more of diversifying gas supply routes – and planned alternative pipelines tend to lead back to Russia.

The most advanced project is Nord Stream, under the Baltic Sea from Russia to Germany. Poland and other bypassed states say it threatens EU unity; Sweden voices environmental concerns. But the European Commission has made it a priority project, warming further to it after Russia’s conflict with Georgia, another energy transit state, apparently persuaded Brussels of the merits of direct pipelines. Gazprom’s consortium partners include Germany’s Eon Ruhrgas and BASF/Wintershall and the Netherlands’ Gasunie, with former German chancellor Gerhard Schröder, as chairman, lending clout.

You have viewed your allowance of free articles. If you wish to view more, click the button below.

Read this