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Grigory Pasko: Looking a gift horse in the mouth, Part 7

[See Part 1, Part 2, Part 3, Part 4, Part 5, and Part 6 of this series.] Nord Stream, Scandinavian Style …and Blackmail, Russian Style Part 7 Grigory Pasko, journalist Если Вы хотите прочитать оригинал данной статьи на русском языке, нажмите сюда. The newspaper «Die Zeit» reported not that long ago that the Baltic “pipeline of Gerhard Schroeder” (with the same success the newspaper could have written “pipeline of Vladimir Putin”), most likely, will not happen due to the ecological concerns of neighboring countries. In accordance with an analysis conducted for the European Commission by Alan Riley – a lawyer from London, it is possible that they won’t be able to transport the gas any earlier than 2015. Riley adds that the cost of the pipeline will exceed $19.1 billion US dollars. As they say in Russia, the deeper in the woods, the thicker the partisans. The closer the period of the commencement of construction of the Nord Stream pipeline – and this is September of the year 2009 – the less likelihood that this construction will commence.

Now all the cards have fallen into the hands of the Swedes. On them depends to a large degree whether the pipeline will be or not be, and if it is to be, then when and what will it be like. After all, one of Sweden’s demands to Nord Stream is that it provide an alternative variant for the laying of the pipe, as required by the Espoo Convention.Of course, the company Nord Stream doesn’t like this. And no doubt it will fulfill this demand only formally. For example, by presenting a report about how a land-based variant is impossible in principle.Perhaps the principal shareholder in the Nord Stream project the Russian corporation «Gazprom» will find other, typically Russian, variants for resolving the problem.Swedish MP Rolf Nilsson told me the following: one of his colleague deputies of his acquaintance in a conversation with a Russian diplomat expressed interest in the prospects of Swedish-Russian relations in the event of Sweden’s objection to the construction of the pipeline. “Then”, the Russian diplomat allegedly answered, “Swedish firms in Russia will start to have big problems.”It should be recalled that a couple of years ago the Swedish company IKEA (which has four mega-markets in Moscow alone) already had problems in Russia. Such problems that the company had to very quickly change its ecological views of business in Russia, while IKEA management in Moscow even had to fear for their life.I learned a lot about how the company Nord Stream operates during my visit to the island of Gotland.Over a dozen meetings with various people convinced me that the company has not lost hope of turning the Swedes to its side through the efforts of PR campaigns. They even dropped the idea of building a service platform not far from Gotland. For now they have dropped it, and for now in words only.Andrew Osborn of «The Independent» in 2006 wrote: “The Baltic Sea is in effect a cemetery for discarded chemical weapons and Goran [sic] Persson argued that it would be foolhardy to lay a pipeline in such an area. His comments have been echoed by worried environmentalists. But the £3.4bn pipeline project… shows little sign of being put on hold.”Only a year has gone by since then, but already much has changed. Prime-minister Göran Persson is no longer in government. The cost of the project has increased greatly. And even though research studies of the route along which the pipe will be laid show that it will be possible to avoid regions of the dumping of chemical weapons, there have nevertheless appeared real signs that the project may not happen. To a large extent this depends today on Sweden’s position.got-more053008The Baltic Sea at Gotland (photo by Grigory Pasko)Representatives of Nord Stream reassure the public that they are “firmly determined to carry out all ecological, legal demands and demands of marine law – both during planning and construction, and during the time of operation of the gas pipeline”.The company also often mentions that in the year 2006, the European Union confirmed the importance of Nord Stream, having designated it “a project of European interest” within the Trans-European Energy Network(TEN-E) Guidelines.Chairman of the management board of «Gazprom» Alexey Miller, in the meantime, does not hide the other objectives of the project as well.“The given projects – are a component part of a strategy to transform «Gazprom» into a global vertically-integrated energy company”, noted Miller. “At the present time, marketing research studies with respect to deliveries of liquefied natural gas (LHG) from the Shtokman field to the new for «Gazprom» American market are going full-blast. The most promising are tanker shipments of LNG to the coast of the Gulf of Mexico and to the east coast of the USA. Possibilities are being worked through for deliveries of LNG to Mexico and Canada with its subsequent transportation to the market of the USA”, declared Miller.Nor is «Gazprom» hiding during the realization of the project entry into the gas market of Great Britain as well. This country, considers Miller, is extremely interested in increasing deliveries of gas, inasmuch as two times less fuel is being delivered there than, for example, to Italy.What with all these plans, it looks like the people running Gazprom are not the least bit worried by the fact that the financial state of the Russian gas corporation is far from ideal. «Gazprom» continues to suffer huge losses, and the consolidated profit of the company is undermined by short-term and long-term debt obligations; the production of gas has fallen for the past four years, while the existing debt burden comprises several tens of billions of dollars.vetryaki053008Wind farms – another Swedish alternative to gas and oil. This one, in southwest Gotland, is the country’s largest (photo by Grigory Pasko)Certain specialists assert as well that the Nord Stream project carries more of a political character and serves as a kind of intimidation for Belarus and Poland. They consider that today’s export capacities are sufficient, and «Gazprom» needs to put money into production, not into non-core assets such as football clubs or mass media outlets.Despite the fact both the cost of the project has increased and the deadlines have already been shifted (the estimated start of gas deliveries has been postponed from 30 September to 30 November 2010), the company Nord Stream is not losing optimism. This optimism is confirmed by signed contracts for the fabrication of pipes for the underwater pipeline. The «United metallurgical company» (OMK) (Vyksunsky metallurgical combine in Novgorod oblast of Russia) will supply 25% of the pipe for the first line of the marine pipeline, while the other 75% will be supplied by the German company EUROPIPE. The contract envisions delivery of around 280 000 tonnes of high-quality steel pipes, for which Nord Stream will pay in excess of 1 bln euros.I had already noted the good work of the PR-managers of the company Nord Stream. However, there are other examples as well: the hatchet-job work of the ham-fisted “specialists” who are called upon to help – I don’t know whom: Gazprom or Nord Stream – acquire a positive image and to force Europe to fall in love with the project. Thus, in one of the articles I found the opinion of “a leading futurologist and leader of the expert communities «Imperial general staff», who, practically foaming at the mouth, proves that “already in the nearest future the European Union will run up against an acute energy crisis”. In the opinion of the futurologist, the European Union has gotten itself caught in the trap of its own ecological principles. The Europeans are catastrophically short on their own oil and gas. By the year 2018, the crisis could grow into an energy catastrophe: the shutting down of significant sectors of electrical circuits, fires at transformer stations, the breakdown of power transmission lines and a part of the generating equipment. A most heavy systemic accident will lead to great human losses because of the chaos in large cities… In short, the end of the world. And called upon to save everyone, of course, is a democratic and generous Russia. True, she is being prevented from doing this. By whom? Why, those damn Americans. The author writes: “…A united Europe, often following in the navigation channel of American policy contrary to its own interests, is simply unable become an independent player on the world stage”. The way out of the situation the futurologist sees in that “sooner or later a new elite will come to power in Europe – far more pragmatic, anti-liberal and anti-American… An elite with which one will be able to talk about mutually beneficial joint projects in another political language.”Unfortunately, in Russia many politicians and businessmen are reminiscent of this futurologist. And in the management of Gazprom there are such types. Just listen to the utterances of Alexander Medvedev, deputy chairman of the managemet board of the company «Gazprom» about how in the event that the projects Nord Stream and South Stream are not realized, then Europe is going to feel the absence of 85 billion cubic meters of gas.If this isn’t blackmail, then what is it?

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Alexander Medvedev as an example of Russian blackmail

Certain Russian public figures now are behaving themselves as if though there are no interests of the countries of the Baltic, but only the interests of «Gazprom» and two German concerns. For the attainment of these objectives, «Gazprom» is using various options, up to and including the purchase in the capacity of managers of former chancellors and prime-ministers.However, for some reason not everybody agrees to work for «Gazprom» and for comrade Putin, the way that former Italian premier Romano Prodi recently did not agree to. This means that something about the image of «Gazprom» doesn’t suit the high-ranking officials.Perhaps the problems of the Nord Stream project are also associated in some way with this image – the image of «Gazprom» and of the whole Putinite style of running things in general? I will note: this style will not likely change after the entry into the post of the new president – Dmitry Medvedev. Previously, by the way, the chairman of the board of directors of «Gazprom»