Sefcovic: There is good potential for cooperation with Gazprom

Maroš Šefčovič [European Commission]

European Commission Vice-President Maroš Šefčovič took advantage of the World Economic Forum to meet with the President of Azerbaijan, Ilham Aliyev, and discuss the Southern Gas Corridor.

In an exclusive interview with EURACTIV, the Slovak Commissioner also commented on improving cooperation with Gazprom, and on Nord Stream 2.

Maroš Šefčovičis vice-president of the Commission in charge of the Energy Union.

Šefčovič spoke with EURACTIV’s Jorge Valero.

To what extent do the concerns raised by the Commission about Azerbaijan’s purchase of the Greek gas operator (DESFA) impact the development of the Southern Gas Corridor?

As regards to Greece, most issues need to be resolved, because you have to have great cooperation from all the participants. It is a more than 3,000 kilometre pipeline. Each and every country that passes through, Azerbaijan, Georgia, Turkey, Greece, Albania and Italy has very similar challenges, routing, i.e expropriation of land or regulatory and environmental issues. Therefore, we organised an advisory council to address the problems when they arise.

Have your concerns about DEFSA been addressed as well?

The discussions continue with the Commission concerning its future in this energy market. But this point was not perceived anymore as a complicating factor. And I have to say that president Aliyev was quite optimistic about the completion of this pipeline even earlier than planned.

I left the meeting quite optimistic that we will see Caspian gas in Europe well before 2020.

But in countries like Greece, Azerbaijan will be the supplier and the distributor. Is that your concern?

I think at that time, DESFA was prepared for privatisation and a company from Azerbaijan (Socar) was ready to invest. So they did.

In such an investment, the Commission always looks at the current and the future situation (of the market) to make sure that we have a proper competition in all areas. Thereby, the modalities, the proportion, the ownership, (and) the share owned by Socar were subject to the discussion.

But I think that now is almost resolved. They are negotiating, but there are no reasons for concern at this stage.

The project to extend Nord Stream has been quite controversial. The Commission has to respond to criticism expressed by at least seven countries with regard to the project. How far have you gone in this effort?

We are waiting for more precise details concerning the routing, environmental impact, public procurement and the steps that will be taken. Of course, all should be in line fully with the EU law.

At the same time, we have quite a clear position when it comes to big infrastructure projects in Europe. They need to bring us comprehensive solutions to energy security in the EU, meaning for all member states. Therefore, the debate on the importance of the preservation of the Ukrainian gas corridor. Besides, Southeast European members are highlighting the fact of how important is to make sure that their energy security is ensured as well.

This debate is rather complex. We would prefer comprehensive solutions, where we would see that the transit through Ukraine is maintained and we can offer good energy security solutions to Southeastern Europe. The Commission is in talks now with the German regulator. But of course, the debate on the extension of Nord Stream is taking place at various levels. We will see how this debate evolves in the future.

But for us, it is clear that EU law must be fully respected. And it is also quite clear that this project cannot get EU funding, because we do not see that it helps to diversify our energy supply. The source [Russian gas] is the same and the route is the same.

To be clear, Nord Stream 2 is not the comprehensive solution you would like to see, right?

No, it isn’t. From the point of view of the transit of gas, we believe we should have a more comprehensive debate on what would be the most optimal solution. I think it would be very useful to have an assessment by experts who can model the most efficient transport routes to Europe, and to look for the solutions where energy security will be increased for the whole EU.

Given the massive investment needs of Iran, and a still-shaky legal environment, is the excitement about the country justified?

We can see how even only the prospects of lifting up the sanctions already impacted on global oil and gas prices. It is one of the three top players when it comes to the potential for exports. In my view, it would be mainly oil at the beginning, since they use most of the gas for their national economy. The fact that a country with such a large reserves of oil and gas is returning is a reason for all this intensive energy debate. We discussed our cooperation with Iran in our college meetings. The framework is set by the High Representative, Federica Mogherini, who is planning a visit to Iran.

Will you be part of the delegation?

We are considering having a bigger delegation. Iran is a very important energy player. Therefore, it is important for our energy union to explore the cooperation with Iran. We will see how these first steps are structured. We want to be there relatively quickly.

[In February, senior officials will travel to Iran to explore possible areas of cooperation.]

Are the opportunities for EU companies reachable in the medium term?

As you rightly pointed out, there is a need for investment and equipment. Iran is a country with enormous natural wealth. Now it is very important to explore all the possibilities and areas.

Have you noticed a change of attitude in Gazprom in recent months, since the Commission opened its investigation? Is the company still a very assertive player?

Gazprom has realised that the market conditions in Europe are changing. We have very clear rules, and competition is becoming stronger. At the same time, they are realising that Europe is a very important market for Gazprom exports. We are very good customers, reliable, we pay on time, and we pay a lot. So it is quite understandable that Gazprom wants to be very present and to preserve, or even to increase, the market share in Europe. We are fine with that. We have only one condition: the respect of EU law, fair practices, and fair prices.

Therefore, we are communicating with this company at several levels. Firstly, there is an ongoing investigation, where Gazprom is participating. Secondly, there are the trilateral negotiations for the winter packages with Ukrainian and Russian ministers, together with Gazprom and Naftogaz, and the Commission. We found very good solutions both for this winter and the previous one. We managed to avoid gas dramas thanks to the protocols we negotiated. I have to say that he Russian side showed understanding for the complex situation.

This positive example of the trilateral negotiations shows that there is good potential for a positive cooperation with Gazprom. I just hope that we could extend this good cooperation for the future. It would be very useful if we can start discussing how we can look even over the longer horizon of this winter, and explore the possibilities of how we can frame the relationship between Russia, Ukraine and the EU in the post-2019 period, when a new transit protocol to bring the Russian gas through Ukraine will be needed.

Has Gazprom evolved from being an aggressive partner to becoming a more cooperative partner?

On these trilateral talks, they have been more cooperative. This is also the case in regards to the Directorate General of Competition’s investigation, although this does not preclude any option as the case is still ongoing.

At the same time, we see that they want to assure a significant presence in Europe very much. Therefore, we are highlighting the importance of respecting the EU rules. And we are sending a clear message that, when it comes to energy security, we would feel more secure if the supply of energy to Europe would be more diversified.

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