Nord Stream 2 – what is it all about?

12. February, 2016 News No comments

Nowadays we have tough times in Oil and Gas industry. Prices fly pell-mell, OPEC is showing their strong either USA and Russia have they own business. The game is played for high stakes due to market demand is still high. In recent days we can hear a lot of news about German and Russia project, Nord Stream 2. What is the controversy and why do not we all want to get him to agree?

Gas pipeline from Russia to Germany through the Baltic Sea, called Nord Stream works with the use of both threads with a total capacity of 55 billion m3 per year since 2011. Gas flows from Russia to Germany bypassing transit countries in Eastern Europe. The third and fourth thread planned under the Nord Stream 2 may allow to double the bandwidth and increase the export of gas in this part of Europe. This will lead to an increase in the importance of Gazprom on the market, the weakening of diversification of supply for Germany and thus other recipients such as Poland, Lithuania, Latvia, Estonia. It will also lead to a weakening of the role of transit Ukraine, making it difficult to stabilize the region.

Opponents of the Nord Stream 2 show the direct, negative impact on the energy security of several countries of the European Union, especially for the diversification of supply sources – one of the key objectives of the, still being created, Energy Union. In addition, it is questionable economic interest behind the construction of the new capacity for the supply of gas, the current shape of the market and the significant risks of long-term investments in co-operation with Russia after the aggression against Ukraine.

Nord Stream 2 was also one of the main topics of conversation between Polish Minister of Energy Krzysztof Tchórzewski and the Minister of Industry and Trade of the Czech Republic Jan Mladek, which took place during the meeting of February 5. Visegrad group should have a unified position in that very case. It is obvious that the pipeline project is not the nature of the business, and the only political. Strengthen the dominant position of Gazprom in the EU markets will make the more difficult will be to build a competitive gas market in the EU – said Tchórzewski.

However, many of the countries of western Europe supports Nord Stream 2. A large part of this project would be Germany and Finland, through whose territory the pipeline would run. The project also was supported by France and the Netherlands. We do not know yet if Denmark will give their permission, which is addicted to decision on the environmental impact assessment (EIA).

Today, 12.02.2016 Polish Prime Minister, Beata Szydło, during a visit to Berlin spoke with Angela Merkel, among other things about Nord Stream 2 and expressed concern about the project – We are concerned about support for the project Nord Stream 2, it is not incompatible with sanctions on Russia – said Szydło.

It is certain that Russia will exert pressure and try to soften opposition eastern and central parts of Europe in this topic. Whether it comes to the installation Nord Stream 2 depends on many factors, but primarily policy. The European Commission is currently investigating a case against the law. The next few months will probably be intensive treatments supporters and opponents.

Sources:  Szydło in BerlinBiznesalertBiznesalert

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