Nord Stream Pipeline is the natural gas pipeline linking the Russian natural gas recourses to German energy market and further markets over Europe. The natural gas is delivered from Siberia to Vyborg in Russia, where the natural gas is pumped into the Nord Stream pipeline and transported to Greifswald in Germany through under waters of Baltic Sea. The project consists of two twin parallel pipelines, which both have capacity of 27.5 bcm (billion cubic meters) natural gas transportation. The first line of the twin pipeline was put into function in November, 2011 and the second line is expected to be launched in 2012.
The project was initiated by the Russian government and supported by Germany. The length of the pipeline is 1,222 km (160 mile) long that make the project the longest under-sea pipeline in the world. After full realization, the project will directly deliver 55 bcm natural gases to European market yearly. The constructor and operator of the project is Nord Stream AG. Russia's Gazprom (51 percent), Germany's Wintershall Holding (20 percent), Germany's E.ON Ruhrgas (20 percent), and the Netherland's Gasunie (9 percent) are the stakeholders of the project.
Approximately, 7.3 billion investment is required for the full realization of the project. Yuzhno-Russkoye natural gas field is the main source for the feeding of the pipeline. The pipeline goes through the Exclusive Economic Zones of Russia, Finland, Sweden, Denmark and Germany, and plus the territorial waters of Russia, Denmark, and Germany. It is also expected that the natural gas will be transported to the wider European markets, such as Belgium, Denmark, France, the Netherlands, the UK, and other countries.
After the completion of the feasibility studies, environmental issues become one of the main challenges that were claimed by the Baltic States. The Baltic States argued that the sup-water of the Baltic Sea is a place for the naval mines and toxic materials that were dropped into the sea during the WWII. In contrast to the arguments of the littoral states, the project initiators held an environmental research and scientifically proved that the construction of the pipeline did not have environmental damages. Despite the challenges, Russia got the permission of those states that claimed the environmental concerns. This opened new era for the direct penetration of Russia into the European market, and strengthen its position in Europe.
Russia is considered the second gas corridor of the EU after Norway gas corridor and natural gas resources from the Russian corridor toward European direction flow through three routes, those are Belarus route with the capacity of 36 bcm, Ukraine 107 bcm and third route will be Nord Stream route with the capacity of 55 bcm after full realization of the Nord Stream project.
There are several reasons behind the launch of the Nord Stream pipeline. Above all, the realization of the project, for the first time, gives great opportunities to Russia directly penetrate into the European energy markets. Thus, Russia will increase its energy influence and eliminate the obstacles on its way toward its penetration into Europe.
The intention of Russia to directly enter into European energy market stemmed from the Russian motives to eliminate emergence of any transit problems in future that probably would decrease the Russian influence over the European energy market. Russia experienced some challenges with the transit states toward the European direction that urged the Russian government to build the Nord Stream route.
Most importantly, Ukraine, as displayed above, is the main transit state for the transportation of the Russian natural gas toward Europe. However, Ukraine is not currently considered reliable transit route for delivery of Russian natural gas to Europe. The disagreements over the transit prices with the Ukraine government led to the disruption of the gas flow to Ukraine from Russia in the cold winter of 2009. The Ukrainian-Russian energy crisis revealed that Russia is not reliable energy source for Europe. Russia understood that it would not able to directly affect to the European energy market by passing through lands of another European state. This view accelerated Gazprom's efforts to extend its ties with Europe, bypassing the transit states such as Ukraine, Belarus. By diversifying its routes toward the European direction, Gazprom achieved two main targets.
First of all, Russia gave message to the Ukrainian government that the transit challenge by Ukraine will result with the diminishing power of Ukraine as a transit state. Consequently, the full realization of the Nord Stream pipeline will lessen the possibility of transit disagreement with the Ukrainian government.
From other point of view, Russia enjoyed the diminishing of the transit fees to Ukraine, since the Nord Stream pipeline opened substantial prospects for the reduction of the energy resources that is delivered through Ukraine. But, this does not mean that Ukraine will lose its importance as transit state. In fact, the Nord Stream pipeline will remove the political leverages coming from the Ukrainian government. What Russia achieves with the Nord Stream is the increase of its diversification toward Europe.
Belarus, another route has some disputes with Russia on transit prices. Since Belarus disputed with Russia on transit prices, Gazprom had disrupted the energy supplies to two refineries, Naftan and Mozyr in Belarus. Although the supplies were recommenced, the tense relations reveal the volatility of the agreements between Russia and Belarus. The significance of the Belarus route for Russia is that Belarus is cheaper transit state. However, there are signs that Belarus will demand the rise of the transit prices.
Therefore, the Nord Stream pipeline will decrease the willing of the Belarusian governments to insist on the transportation issue, since the strong position of Belarus will result with the reduction of transit sitiation of the state. Thus, the construction of the Nord Stream pipeline should not be understood as the Russian motives to replace the traditional transit states, but rather to diversify its routes to the European market and prevent the any political leverages coming from those traditional transit states.
The implication of the Nord Stream pipeline for the EU energy policy is that the EU once more lost its prospects to build a common European energy policy. The construction of the Nord Stream pipeline reveals the disagreement of the EU member states on the creation of coordinated energy policy within the Union. Since the EU does not have common energy policy, every member state pursues its own energy policy and has its own energy agenda. This led to the unwillingness of the EU states to form a common view toward the Russian energy market.
The construction of the Nord Stream pipeline showed that Germany has good relations with Russia and she is not willing to participate in the common policy toward the Gazprom Giant. Poland, one of the main powers in the EU is interested in the establishment of the common energy agenda against Russia, since Poland lost its chance to be one of main energy transit country between Russia and Europe. From other point of view, Poland is more concerned with the monopolistic influence of Russia. Therefore, Poland strongly supports the formation of any alternative route to the Russian direction.
Despite the strong withes, the main motors of the EU such as Great Britain, France, Germany and Poland are not ready to form a common energy policy toward external actors, because each state supplies its energy needs from different sources and with the different conditions. While the Eastern and Southern European states are strongly supporting the creation of the alternative route to the Russian corridor, the western members are not willing to pursue that policy.
To sum up, the Nord Stream pipeline, most importantly will give more bids to Russia in the case of the disputes with the traditional transit states. From other point of view, the Nord Stream pipeline once again showed the impossibility of the creation of the common European energy policy.
Namiq Abbasov
Qafqaz University, Azerbaijan
Department of European StudiesÂ