MORE ON THE CANCELLATION OF SOUTH STREAM https://youtube/watch?v=GURF6kIYEZw The latest Crosstalk in which I appeared debating this subject was very interesting for me in that the two energy professionals who appeared on it (1) disputed nothing that Peter Lavelle and I had to say about the reasons why South Stream was cancelled and (2) still seemed to be in the grip of denial, hoping against hope that South Stream might be revived. The quote from Alexei Miller (CEO of Gazprom) I reproduce below should put any such idea beyond doubt. South Stream is dead and any idea it might be revived is wishful thinking. Millers comment also confirms the accuracy of Peter Lavelles analysis and mine on Crosstalk and in my article which appeared on the Sakers website and in Russia Insider: Gazprom will not trade in Europe on the EUs conditions, which as I said are ultimately aimed at forcing the break-up of Gazprom. Through their wilful behaviour in trying retrospectively to impose the Third Energy Package on the South Stream project (not to mention the other sanctions they recklessly imposed on Russia this year) the Europeans have permanently alienated their key energy supplier. On the subject of whether this is a victory or defeat for Russia, Mark Sleboda is right in saying that this is not a victory for Russia since the Russians have been obliged to call off a project that they had clearly wanted. However it is not a defeat because of their success in quickly finding an alternative customer/partner albeit one who will pay a lower price. As I said both on Crosstalk and in my article on the Sakers blog, price is only one part of a business relationship. The potential gains in finding a reliable and predictable partner and in the likely geopolitical gains from forging a long term relationship with Turkey (which will surely outlast the Erdogan government) arguably outweigh considerations of price. What would have been a defeat for Russia (and a sign of the desperation some of the more overexcited commentary especially in the US is talking about) would have been if Russia had capitulated to the EUs demands by accepting theThird Energy Package and by pressing ahead with the South Stream project on that basis. This the Russians have made clear they will not do. In the meantime some at least of the costs sunk into the South Stream project can now be redirected to the new Turkish pipeline project. From Interfax Europe will have to care about delivering Russian gas from Turkish border - Gazprom CEO Miller MOSCOW. Dec 6 (Interfax) - After the closure of the South Stream gas pipeline project, European companies should care themselves about the delivery of Russian gas from the Turkish border to the end consumer in line with the Third Energy Package, Gazprom CEO Alexei Miller said in an interview in a Saturday analytical program on the Rossiya-1 television channel hosted by Sergei Brilyov. The principle of our strategy in relation to the European market is changing. The decision on stopping South Stream is the beginning of an end of our operation model on the market, within which we oriented ourselves toward supplying [gas] to the end consumer on the European market, Miller said. But you cant win love by force. If the buyer doesnt want the purchase to be delivered home, well, then perhaps he needs to get dressed and go to the store, and if it happens in winter, get dressed warmer. Well, he could also take some package, of course, which can well be the Third Energy Package, but what counts most is that it should not be empty. In our case, the store is certainly the delivery point on the Turkish-Greek border, Miller said. The Third Energy Package does not apply to Gazproms new project instead of South Stream, i.e. a gas pipeline across the Black Sea to Turkey and further to the border with the EU (Greece), he said.
Posted on: Sat, 06 Dec 2014 13:46:04 +0000
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