“The Brussels Diary with Yana Toom”: EU and Russian Gas


Sometimes it seems as if the coronavirus has sorted out all problems, but this is not so. The pandemic will pass; however, the EU's dependence on Russian gas remains. This week, I, as a member of the EU-Russia Parliamentary Cooperation Committee, received an interesting analysis of the situation. In short, it is too early to scupper relations with Russia.

Yes, the EU is striving to diversify gas supply sources. We proclaim to adhere to the Green Deal and to considerably reduce CО2 emissions. However, according to the prognosis of the International Energy Agency, the EU will consume 480 billion cubic metres of natural gas in 2025 – only three billion cubic metres less than in 2018. At that, we will produce 50% less gas to keep to the Green Deal. As a result, gas imports will increase by 51 billion cubic metres. Gazprom will have a field day.

I would like to remind you that last year 150 billion cubic metres of Russian gas were shipped through the pipelines to the EU. The share of liquefied gas, which, by the way, is not only American but also Russian, is increasing in our imports, although, not as much as to abandon pipelines. Due to the warm winter and pandemic, Europe requires less gas now and Gazprom has suffered because of it. The economy will recover and demand for gas along with it.

At that, Gazprom clearly intends to retain its competitive advantages. Despite Donbas in the Crimea, Russia and Ukraine, with the mediation of the EU, have agreed on a new transit at the last moment. Not for a year, as was the wish of the Kremlin, and not for ten years, as Kiev and Brussels wanted, but for five years. A model compromise.

In the autumn, the European Court of Justice, in response to an action brought by the Poles, prohibited Russians from shipping gas at previous volumes via the OPAL pipeline; however, Gazprom, according to the experts, circumvented this obstacle by technical means and the volumes of Nord Stream 1 suffered only slightly. It is obvious that Nord Stream 2 will be finished with Russia's efforts by the end of this year or the beginning of next year. TurkStream was launched on 8 January to carry gas to the South and South-East European countries. Its route in Bulgaria has not yet been completed, but this is only a matter of time.

The idea of diversification of gas supply to the EU is a good idea; however, we do not have any choice. Liquefied gas from the USA is pricey, and investments into terminals have been postponed everywhere as the coronavirus hit this business sector strongly. There is Azerbaijani gas, but there are problems with its development. There is also Turkmen gas, which is mainly bought by China. In order to buy gas from Turkmenistan, the EU wants to build a Trans-Caspian Gas Pipeline; however, the efficiency of this project is questionable, and Russia and Iran oppose it because the Caspian ecological concerns are more important.

The intention of the EU to transfer to hydrogen also comes down to natural gas. There is green, ecologically clean hydrogen, which is produced by the electrolysis of water. There is blue hydrogen, which is produced from natural gas with some СО2 emissions but in small amounts. Although green hydrogen is better in the long term, blue hydrogen is more real today because it is cheaper.

All in all, we cannot get by without gas. This does not mean that we have to bow to Russia – there is no need to bow to anybody. Still, there should not be any antagonism without good reason.