Nord Stream Expansion in the Works: Gazprom Has Ambitious Goals for German Gas Market
Gazprom has set a new record on gas exports to Europe. Last year, they delivered over 194 billion cubic meters. In 2018, the company plans on beating its own record, and in the future, it plans to negotiate the expansion of the Nord Stream pipeline. This was announced at the Gas Forum in Berlin by Gazprom's Deputy Chairman Aleksandr Medvedev.
Our correspondent, Arseny Molchanov, observed the Forum. He works in the German capital.
- What is the current relationship between Russia and the EU and what did the Forum's participants say?
- Hello. The relationship was being built amid the last cold winter, which saw gas consumption go up in Europe. Gazprom's Deputy Chairman Aleksandr Medvedev mentioned an interesting metaphor. He compared the current situation with the Olympics' Russia versus Germany hockey finale. The finale was really something to see. NHL stars didn't attend the game, which was a sign for the EC, which hasn't attended the event for the third year in a row. It may seem symbolic that their office is right across from the site of that game.
Despite all the talks about the end of the gas era in Europe, the demand keeps growing. Last year brought a 5% increase, which brings the total to 570 billion. For comparison, we already mentioned the figure of 194 billion, which means that one-third of their supply is from Russia. Once it gets to the Old World, to Germany, it's processed at the distribution hubs, and then it goes all over Europe. Europe brings us new records; we might reach the 200 billion mark in a couple of years. Let's listen to a few excerpts from the exclusive interview with Aleksandr Medvedev.
Aleksandr Medvedev, Gazprom's Deputy Chairman of the Managing Committee: "For the past two years, we've been setting impressive records. In 2017, we added 5 billion to our level. Right now, we're on pace to break that record. Sure, it's not a sport, but we can still chase impressive numbers. I'm confident that we'll exceed 200 billion in exports by 2020".
As we already know, Norway is the biggest supplier. The Nord Stream was also fully loaded this winter season. Obviously, Nord Stream-2 was discussed today. The gas pipeline runs along the bottom of the Baltic Sea and is the alternative to the Nord Stream-1, which is 1,800 km shorter than the transit route via Ukraine. We assume this alternate will be built according to all the agreed parameters. Three weeks ago, Berlin gave their permission, and so did Helsinki a week ago. We now await Denmark's and Sweden's decisions. There is a chance that, when they'll be building new underground gas storage facilities, they'll negotiate building the new transit route, the Nord Stream-3. Aleksandr Medvedev mentioned it in our exclusive interview.
Aleksandr Medvedev: "We've always said we'll deliver as much gas to Europe as they need. We have proven reserves, we have transit routes, and we're building new transit routes. If Europe announces their demand, if they're willing to sign the necessary contracts, we might need new gas transit projects, a Nord Stream-3 perhaps".
As they've said here at the conference, Nord Stream-2 and Nord Stream-3 are optional, not mandatory. Nobody is forced to use this infrastructure; it's just another advantage of direct deliveries from Russia. Amid this fact, local gas production is decreasing; Europe produces less than 50% of the gas they use. I'm talking about Norway and the UK; their gas fields are depleting. By 2020, a significant drop is expected. By 2030, the Netherlands' Groningen gas field, which is Europe's largest gas field, will be shut down. Over the past few years, gas production has been cut in half there.
This is all I have for now, but we'll keep an eye on the situation. Back to you.
- Thank you, Arseny. That was my colleague, Arseny Molchanov, reporting from the German capital on the prospects of bilateral energy cooperation between Russia and the EU.