Pipeline policy follow-up

As a follow-up to my post from late August about the lack of joined up thinking within the EU for its gas pipeline plans, a more comprehensive article has emerged about the new relationship being forged between Russia and Turkey;

pipes-1

The article talks at length about how Russia will be able to increase its dominance in European gas markets – directly through a new TurkStream pipeline and indirectly through Turkey’s influence over the TANAP pipeline.

If this happens, Russia’s state-owned Gazprom will exercise high levels of control over both projects.

As a further embarrassment to the EU; Russia and Azerbaijan are looking to be involved with Iranian gas reserves (which are vast) and which were

also coveted by the West, which hopes to ship them into the EU as a hedge against Russia.

Far from reducing the EUs reliance on Russian gas “which supplies a third of the EU’s natural gas overall—though a much higher percentage to Germany and other northern EU nations” it seems that Russia is likely to increase its share unless another avenue can be found.

The most likely option at the moment is LNG from the US which has a glut of gas available thanks to fracking which has opened up new export opportunities as well as reducing domestic energy prices – too bad the EU (and previous UK governments) seem determined to ignore this fantastic opportunity on this side of the Atlantic.

Plan for new connector is not joined up thinking

Two interesting stories about the European gas market have emerged recently.

Gas Holder 2

The first, points to an EU funded plan to build the “Balticconnector”, between Finland and Estonia, to help reduce the Baltic states’ dependence on Russian gas imports.

This article states that the EU is funding 75% of the Project – the maximum allowed. What’s interesting here is that this implies that there is no business case for the project – i.e. there’s no profit in it – otherwise an energy provider or gas company would be funding the project. So clearly it is politically motivated.

This is further proven by the fact that;

The pipeline will be constructed by Finnish Baltic Connector Oy, a project company set up by the Finnish government, and Estonian Elering AS, operator of the country’s gas and power grid.

And that

The Finnish government decided to go ahead with the pipeline last year, despite its majority state-owned gas utility Gasum pulling out due falling domestic demand.

I wonder how the people of Europe feel about their money being used for political purposes?

Particularly as a second article talks about the TurkStream gas project that will consist of two gas pipelines supplying Russian gas for use by Turkey and for delivery to Europe. Thereby increasing Europe’s dependence on Russian gas.

Maybe the EU should stop meddling in things it has no control over.