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06/12/2016

European Winter Package must be respected, Šef?ovi? tells Russia

Energy

European Winter Package must be respected, Šef?ovi? tells Russia

Gas rig being transported to drilling site. Limassol, 2012.

[Thulborn-Chapman Photography/flickr]

Russia still needs to resume gas supplies to the EU via Ukraine, despite abandoning the South Stream gas pipeline and a new initiative of setting up a pipeline to Turkey, the EU’s Energy Union chief said on Tuesday (9 November).

Following the European energy ministers’ Council in Brussels Tuesday morning, Maroš Šef?ovi?, the Vice-President of the Commission in charge of Energy Union, said that the gas deal between Russia and Ukraine brokered by the EU in October, the so-called European Winter Package, must be respected.

“The European Winter Package, which is a good agreement, should be respected and so far it also has been. We had the latest positive sign yesterday (8 December) where Ukraine ordered one billion cubic metres of gas from Russia. We have an agreement until March next year, so I believe this will get us over the winter,” Šef?ovi? said at a press conference.

Russia scrapped the South Stream pipeline project to supply gas to southern Europe, without crossing Ukraine on 1 December, citing EU objections, and instead named Turkey as its preferred partner for an alternative pipeline, with a promise of hefty discounts. The proposed undersea pipeline to Turkey will have an annual capacity of 63 billion cubic metres (bcm), more than four times Turkey’s annual purchases from Russia. Turkey’s position of additional gas will make the country an important gas hub at the EU’s southeastern edge, the Turkish-Greek border.

Šef?ovi? stated that he has received strong assurances from both the Turkish side that they have strong intentions of continuing building up the Southern gas corridor on time.

“They have asked the Commission and member states to set up a steering group which should help making sure that the EU will have the same timetable. So when the gas comes to the Europeans’ borders, it can be picked up by the gas systems in Europe. This is what we have promised them,” the Energy Union chief said.

From Cyprus to Crete

The Commission is also looking into other energy projects in the Mediterranean that could supply Southern Europe with gas, Šef?ovi? said, particularly a pipeline linking the newly-discovered gas riches surrounding Cyprus with neighbouring country Greece.

“This project was discussed yesterday (8 December) when I had bilateral talks and joined meetings with both Cypriot and Greek ministers,” Šef?ovi? continued. 

“We discussed parametres of the project, the reasons, discoveries and plans for further exploration. Of course we also discussed how this project could be bankable and useful for Cypriots’ energy needs, but also under what conditions the discoveries of gas in the Eastern Mediterranean could contribute to the overall energy security of the EU,” he added.

Cyprus, Greece and the Commission will continue with a feasibility study as especially the gas inter-connection between Cyprus and Crete is challenging from a technical point of view rather challenging. However, this pipeline could play a future important role for the energy security of the EU, the Commission’s Vice-President concluded.

Background

On 1 December, Russia scrapped the South Stream pipeline project to supply gas to southern Europe, without crossing Ukraine, citing EU objections, and instead named Turkey as its preferred partner for an alternative pipeline.

South Stream is a Russian sponsored natural gas pipeline. As planned, the pipeline would run under the Black Sea to Bulgaria, and continue through Serbia with two branches to Bosnia and Herzegovina and to Croatia. From Serbia the pipelines crosses Hungary and Slovenia before reaching Italy [see map]. Its planned capacity is 63 billion cubic metres per year (bcm/y).

The key partner for Russia's Gazprom in the South Stream project is Italy's largest energy company, ENI, and Germany's Wintershall, a subsidiary of BASF.

Timeline

  • March 2015: Termination of gas supply deal between Russia and Ukraine.