EU should use its existing tools to resist Nord Stream 2, forum told
The European Union should use tools it has already instead of calling for US sanctions to resist the Russian-backed 746-mile Nord Stream 2 natural gas pipeline, one speaker suggested at a June 25 Atlantic Council discussion about Central and Eastern Europe’s 21st Century energy needs.
Sandra Oudkirk, deputy assistant secretary for energy diplomacy at the US Department of State, confirmed that the Trump administration has received several requests to sanction the proposed Gazprom-sponsored pipeline that would extend from Russia beneath the Baltic Sea to Germany.
“But we believe there are still significant tools within the EU which can be used and should be considered,” Oudkirk said. “I think people ask for US sanctions because they think Nord Stream 2 is a done deal. It’s not. There are still levers available to the EU.”
Completing more reversible pipeline interconnections within Europe also is important, Oudkirk and other speakers emphasized. “Our first goal is to finish the North-South Corridor,” said Pal Sagvari, Hungary’s ambassador at large for energy security. “The Krk Island LNG terminal is back on track and negotiations are going well. It’s not commercially viable yet but has strong national support.”
The Central European Energy Union has identified projects to support that would ensure that assets and supplies would not be stranded, Sagvari said.
Ambassador Dusan Matuley, director general for economic cooperation in the Slovak Republic’s Foreign and European Affairs Ministry, said his country also wants to be a constructive player in the North-South Gas Corridor connecting an LNG terminal in Poland; the Baltic Pipeline through Poland, the Czech Republic, Slovakia; and the proposed Krk Island LNG terminal in Croatia.
Changes since 2008
“We’re in a different place from 10 years ago, when gas flowed exclusively from the east,” Matuley said. “We’ve signed a financial commitment with Poland and Slovakia on their interconnector. We want long-term contracts for commercially viable supplies and we will support a mandate for the European Commission to begin negotiations about Nord Stream 2.”
Vaclav Bartuska, the Czech Republic’s ambassador at large for energy security, said, “There’s no doubt that Nord Stream 2 divides Europe, but there also aren’t any legal tools left to stop it. All the permits have been approved. We don’t expect the EC to approve an amendment to stop it anytime soon. It’s important to remember that France, Italy, and Germany buy the most gas in Europe, and their participation will be necessary.”
Barbara Doric, managing director of Croatia LNG, said, “We have been trying to get the necessary tariffs in place so we can dramatically decrease our reliance on a single supplier. We’re hearing this is a good approach. The second round of our open season started [June 22], and we’re hearing about 1 billion cu m of yearly capacity being sufficient to start service by Oct. 1, 2020.”
Tallurian Inc. Vice-Pres. Anita Orban said she had only good news to report. “The first wave of LNG projects has been built. Now, the US supply push coincides with demand-pull, particularly in Central Europe,” she said.
Orban noted that a lot of gas is associated with US crude oil production, and Europe is its natural destination. “Demand there grew 18% in 2017 because production fell and a market surplus began to ease. We estimate that about $170 billion will need to be spent in the US for pipelines and liquefaction,” she said. “LNG is increasingly becoming a commodity that will be more available and competitive.”
Contact Nick Snow at [email protected].
Nick Snow
NICK SNOW covered oil and gas in Washington for more than 30 years. He worked in several capacities for The Oil Daily and was founding editor of Petroleum Finance Week before joining OGJ as its Washington correspondent in September 2005 and becoming its full-time Washington editor in October 2007. He retired from OGJ in January 2020.
