Russia Makes Transit Strike

Kommersant ^ | Sep. 16, 2005 | Vladimir Vodo, Vilnius; Mikhail Zygar, Natalia Grib

[lizol]

Russia Makes Transit Strike Lithuania is against Northern European Gas Pipeline

Prime Minister of Lithuania Algirdas Brazauskas announced yesterday that construction of the Northern European Gas Pipeline (NEGP) between Russia and Germany will turn into a catastrophe for the Baltic Sea. It is a first real attempt to prevent accomplishment of the project, and, possibly, a beginning of the war of Baltic countries and Poland against the Russian-German gas-political alliance. Ecological Alarm

The project of the gas pipeline on the bottom of the Baltic Sea should connect the Russian town Vyborg and German Greifswald, bypassing Lithuania, Latvia and Poland. For already a week this is a central topic of heated debates in Baltic countries. From the beginning the politicians of these countries had a negative attitude toward this Russian-German project. However, the first real attempt to shut down the project was made only yesterday. The leadership of one bypassed country officially said that this project is ecologically dangerous.

During the government session, Lithuanian Prime Minister Algirdas Brazauskas reacted to protests of Lithuanian ecologists. According to them, since WWII on the bottom of the Baltic Sea there are stashes of German chemical weapons. If the NEGP rout would go through this dangerous dump, a terrible ecological catastrophe would threaten to whole Baltic Sea.

Quoting the scientists' conclusions, Brazauskas stated: "We, and all other states, would demand to respect the rules of Baltic Sea Preservation's Convention during the all construction works (NEGP -Kommersant). The Baltic Sea is everybody's property and not just one or two states." The Prime Minister promised that he will for sure raise the issue during the summit of Northern European leaders in Reykjavik.

The route of NEGP is going through Baltic Sea from Vyborg (Leningrad Region) to Greifswald (Germany). The NEGP, with a length of the pipeline 1200 kilometers, will be launched, according to Gasprom information, in 2010. The first stage plans to build one line with the capacity of 27.5 billion cubic meters of gas per year. The project also has plans for construction of the second line, which will increase the passing capacity of NEGP to 55 billion cubic meters. That would allow taking half of the gas from the Ukrainian export direction. The total investment in the project is estimated to be 4 billion Euros. The agreement about the NEGP construction was signed a week ago in Berlin by the heads of Gasprom, BASF and E.ON AG during Russian President Vladimir Putin’s visit to Germany.

The speech of the Lithuanian prime minister was not the first statement of protest against the gas pipeline construction. Right after the signing of the Russian-German agreement, President of Poland Alexander Kwasniewski said the "Schroeder-Putin pact is bad from an ecological point of view and weak from economic and political points of view." The Poland's parliamentarians immediately adopted a document, which says that the German-Russian agreement of NEGP "threatens the security and independence of Poland." Similar opinion was expressed by Latvian Prime Minister Aigars Kalvitis. He said that "construction of NEGP planned by Russia and Germany on the bottom of the Baltic Sea can present the threat to the security of the whole region. This project does not follow the unified energy policy of the European Union, and because of that Latvia intends to express a negative attitude toward that."

Lithuanian politicians were even more emotional about the subject. For instance, the deputy of European Parliament Vitautas Landsbergis said that "this new alliance of Germans and Russian was planned to change the political map of Europe" and if the NEGP would go through, then Baltic countries and Poland would be left at Russia's mercy.

Pipe war

Such hysteria about the NEGP project in Poland and Baltic countries is not accidental. The new pipe would become a key factor that would affect the policy in the region. The recent history shows how pipeline projects were able to drastically change history in post-Soviet space.

In the end of 1990's the relationship between Russia and Ukraine was pretty tense. Moscow appeared to be depending on Kiev, because the only gas pipeline from Russia to Western Europe was going through the Ukrainian territory. The monopoly of "Naftogas of Ukraine" became famous for its colossal debt to Gasprom and theft of the Russian gas. The situation was even more complicated because of the pro-Western orientation of the Leonid Kuchma regime. To get rid off Ukrainian transit dependence, Moscow started to plan a gas pipeline, which would bypass Ukraine. In the end of 1999, the pipe Yamal-Europe was ceremoniously open by Alexander Lukashenko, President of Byelorussia. The construction of the pipeline was not even finished yet, but Kiev's policy already went through drastic U-turn. In 2000, the pro-Western government of Viktor Yushenko (he was a prime minister at that time -Kommersant) resigned. Leonid Kuchma became a frequent traveler to Moscow and stated that the "relationship between two countries made a colossal step forward." Ukraine stopped stealing gas and Moscow got powerful everage to pressure Kiev.

If before, the shutting off a gas pipe could cause an interruption of the Russian gas supplies to European consumers and heavy fines for Gasprom, after the launch of Yamal -Europe pipeline, the gas wars between Ukraine and Russia stopped. Kiev lost all its trump cards.

However, the new pipeline, which was bypassing Ukraine through Byelorussia, Poland and Slovakia turned out not to be ideal for Russia. The new gas partners started to become less and less convenient. Poland, which was entering NATO and EU in that time started to play an important role in Eastern Europe, and tried to spread its newly acquired "European" influence over two former Soviet republics -- Byelorussia and Ukraine. The Yamal-Europe pipeline, which was going through Polish territory, was reinforcing Warsaw’s power play. The trust between Russian and Poland was finally undermined in the end of last year. Poland supported the "Orange Revolution" in Ukraine and was lobbying it in the West. President Kwasniewski bypassed President Putin in the personal fight: the lobbyist for Viktor Yushenko appeared to be stronger than the lobbyist for Viktor Yanukovich.

Byelorussia is also a problematic neighbor. Lukashenko’s regime is maybe friendly but totally unpredictable. Two years ago Moscow had to open a full-scale war against Minsk trying to increase payments. With its plans to build a third way to Europe for Russian gas, bypassing everybody, Moscow delivers the powerful blow to all transit countries. Ukraine, Byelorussia and Poland are losing all their previous rights and privileges. First of all, Ukraine will soon stop to receive a free gas that is considered as the payment for transit tariffs. Then Minsk and Warsaw would be next in line to suffer: the decision to build NEGP puts the end on the plans to build second line of Yamal – Europe pipeline. To construct the pipeline in the bottom of the Baltic Sea is much more expensive than to run the line above the grounds of Byelorussia and Poland. That would mean there is no point to dream anymore about the expenses for the new line within Yamal-Europe. Moreover, the construction of NEGP would be a tremendous strike to Ukrainian economy. If the first line of the pipeline is finished by 2010 as planned, then the second would follow, it is possible that Russia would not have enough gas to fill up all three pipelines. That would mean that volumes of pumped gas through Ukraine would be decreasing. Thus, Moscow would receive a unique tool to put the pressure for its neighbors.

The gas union

The agreement to build NEGP leads Moscow to absolutely different political level in Europe. In fact, it means that Moscow is striking an unbreakable political union with Germany. Several weeks ago, European analysts were saying that after the possible defeat of Schroeder in parliamentary elections in Germany, the relationship between Moscow and Berlin will become cooler. Now Moscow does not care who is going to win in German elections: everybody is interested in Russian gas.

Angela Merkel, who, most likely would become next chancellor of Germany, was trying recently to calm down the Polish neighbors. She promised them that she won't have a dialog with Russia bypassing Warsaw. She even said that the "relationship with Moscow should be more coordinated within the frame of the European Union." However, any warm feelings toward Poland will make not her refuse from the signed agreement. The electorate would never forgive her loss of cash and energy resources. And her political opponents in the Social Democratic Party will always use it as a weapon against Merkel. Any step away from the plan of NEGP construction will give Gerhard Schroeder, future opposition leader, a reason to accuse Merkel of being careless about national interests.

So, "pact of Schroeder–Putin," as it was called by the Polish president, is the ideal situation for Russia. Brazauskas told Kommersant, that annual gas demand in Lithuania is 2.5 billion cubic meters compared with 55 billion cubic meters of annual capacity of NEGP. "For that reason the weight of our demands (build the pipeline through Lithuanian territory -Kommersant) is commensurate with our needs," Lithuanian leader said.

However, being a realist, Brazauskas chose a very precise method to undermine the plan. The Baltic Sea, which supposed to receive the pipe, is a very delicate region. On its shore are a lot of countries with strong civic-minded societies. And such a small thing for CIS as ecological protests would be heard in Baltic countries much better. The Georgian government was able to calm down its own people's fear about the ecological danger of the pipeline Baku-Jeikhan. However, it might not be enough of Moscow and Berlin's political will to overcome resistance in Baltic Sea.

[RusIvan]

You be surprised but Russia has third way to curcumvent any objections.

She began production of liquidized gas. So if she will dedicade few bln of dollars she may stop any gas deliveries through pipes and turn to by tankers of liquidized gas.

Then Poland will receive her gas from west through Dania then Germany. I hope it won't be so expensive for her:).