MEMO FROM THE CEO: Russian-Greek deal – the extension of Turkish Stream, or the South-European gas pipeline

MEMO FROM THE CEO: Russian-Greek deal – the extension of Turkish Stream, or the South-European gas pipeline

Jun 24, 2015

On June the 19th, during the St. Petersburg International Economic Forum, Russia and Greece signed the first official Memorandum of Understanding on the construction of the so-called South-European gas pipeline on the territory of Greece, which will be an extension of the Turkish Stream pipeline. Russia plans to bring gas to the European territory of Turkey, and says it’s up to the EU to decide how to transport it further. In reality, Russia aims to build a pipeline project across Greece, Macedonia, Serbia, and Hungary to Austria Most of Gazprom’s clients have gas contracts which specify Baumgarten as the delivery point. At this incipient stage, the estimated cost of the South European gas pipeline is 2 billion EUR. It seems that the funds needed to start the joint venture will be provided by the Russian side. The construction of the Greek extension of the Turkish Stream is to start in 2016 and is supposed to be completed in 2019. The capacity of the new pipeline is expected to be 47bcm/year. At the same time, Gazprom, together with E.ON, Shell, and OMV, agreed ‘to add two extra strings to the bow’ of the Nord Stream pipeline. The project will not fall under the restrictions of the Third Energy Package. The new project is actually the second Nord Stream, the so called extra wing, parallel to the Nord Stream. For now, the European Commission remains sceptical. “Announcing something is one thing, doing it is quite another,” said a Commission spokesman, adding that any energy project must comply with EU rules. “Our policy is not more gas, but more diversification,” the EU’s [...]

Finland expands energy co-operation with Russia

Dec 16, 2014

With Finland unveiling plans to export electricity to Russia starting next year, and the country’s leading energy group, Fortum, aiming to invest €4.2 billion in Russia by the end of 2015, the ties between the Finnish and Russian energy sector are expected to further strengthen, and Russia is poised to bolster its foothold in Finland’s energy sector.  Starting on the 1st of January, 2015, Finland and Russia will launch a two-way electricity trade, with 350 megawatts (MW) of capacity available for exports, according to the information obtained by Reuters. As the Finnish government is fostering lower energy use in the country, Finland’s dependency on electricity imports from Russia has steadily decreased over the past years, and Helsinki is now left with a surplus which can be exported to neighbouring markets.  Between 2011 and 2013, Russian annual electricity exports to Finland dropped from about 11 terawatt-hours (TWh) to some 4 TWh. Local industry representatives say that Russian imports are expected to total between 3 and 4 TWh in 2014, with most electricity expected to be imported during night hours and weekends.  Meanwhile, the structure of Finland’s total energy consumption remains highly diversified, with nuclear power representing a share of 18%, hydro and wind power generating a combined 4%, coal holding a 10% stake, wood fuels generating 26%, natural gas and oil representing a 7% and 21% share, respectively, peat generating a further 5%, and net imports of electricity and other sources covering the remaining 9%, according to data released by Statistics Finland in September, 2014.  As nuclear power generates a significant share of Finland’s energy consumption, the recent decision by [...]