Greece and Russia discuss pipeline deal

Panagiotis Lafazanis [Wikimedia]

Greece held “constructive” talks with the head of Gazprom, in Athens yesterday (21 April), and hopes that the two sides will soon reach a deal on a pipeline that will bring Russian gas to Europe via its territory.

The Greek government expressed interest in the pipeline during talks between Prime Minister Alexis Tsipras and Russian President Vladimir Putin in Moscow this month, and was hoping Russia would give the country advance funds for the project based on future profits it could earn from the pipeline’s operation.

In comments made to reporters on Tuesday after meeting Tsipras, Gazprom Chief Executive Alexei Miller did not make any reference to any advance payments to Greece from the pipeline.

>> Read: Speculation rife over Russia’s Turkish Stream loan to Greece

Greece is fast running out of cash and hopes to strike a deal with its EU/IMF lenders on a reform plan that will unlock fresh aid under its €240 billion bailout.

On Saturday, Russia denied a German media report that suggested the gas pipeline deal could add up to €5 billion to Athens’ depleted state coffers.

“The pipeline is of big interest to our country and is among our priorities,” Greek Energy Minister Panagiotis Lafazanis told reporters. Lafazanis had earlier met Miller separately.

“We are continuing talks with the Russian side and we hope to reach an agreement very soon,” Lafazanis said, describing the talks as constructive.

Lafazanis declined to comment when asked by reporters about any advance payments.

After aborting a $40 billion South Stream pipeline last year, Russia is now pushing ahead with plans to build the so-called Turkish Stream project to Turkey and further out to Greece via the Black Sea, in line with its plans to stop exporting gas via Ukraine by 2019.

Greece likes the concept of the pipeline, but not its name.

>> Read: Tsipras: ‘Turkish Stream’ will have another name on Greek territory

“The project can be implemented by an Russia-EU consortium. There are European companies now which are interested in this project”, Miller told reporters in comments translated from Russian.

Miller said Gazprom would pump up to 47 billion cubic metres (bcm) via Greece through the pipeline, which would be implemented strictly according to EU law.

Gazprom warned the European Union this month against moves to block its plans to bypass Ukraine as a transit country for its gas to Europe.

Eurogroup head Jeroen Dijsselbloem said on Tuesday that Russia was not a viable alternative source of financing for Greece.

“They are discussing a gas pipeline,” Dijsselbloem told broadcaster RTL. “My information is that that deal isn’t in place yet and that it won’t lead to big payments in advance.”

The Commission is expected today to launch a legal attack on Gazprom.

>> Read: EU to charge Gazprom with market abuse

Facing objections from the European Union, in December, Russia abandoned its $40 billion South Stream project which would have been extended under the Black Sea to Bulgaria, and carry up to 63 billion cubic metres (bcm) of gas annually to Europe.

Instead, Russian gas exporter Gazprom said in January it planned to build an undersea gas pipeline with the same capacity to an as-yet unbuilt hub on the Turkish-Greek border by the end of 2016.

The EU is sceptical as to the chances of this project and officials in Ankara said that its timeframe was unrealistic.

>> Read: Šef?ovi?: Turkish Stream ‘will not work’

>> Read: Political concerns mar Turkish Stream project

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