Putin and Schroeder get Nord Stream pumping

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Putin and Schroeder get Nord Stream pumping

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A controversial pipeline to pump Russian gas to Europe has been officially inaugurated.

The 8.8-billion-euro Nord Stream project was agreed in 2005 by then Russian President Vladimir Putin and then German Chancellor Gerhard Schroeder – and both men were on hand to launch the first test flows.

Last year, 95 billion cubic metres of Russian gas were pumped to Europe via Ukraine.

Nord Stream will eventually carry up to 55 billion cubic metres a year along the bed of the Baltic Sea, straight to Germany.

The 1,200 kilometre route by-passes Ukraine completely as does the South Stream pipeline which is due to start pumping in 2015. That weakens Kiev’s hand as it tries to renegotiate the terms of a 2009 gas deal with Moscow.

Putin has made it clear that one of the purposes of the project is to lessen Russia’s reliance on Ukraine which he says is trying to exploit its unique transit status.

Alexei Miller, President of Gazprom which has a controlling stake in the pipelines, was even clearer.

“The price of gas for Ukraine is lower than that for countries such as Poland, Hungary, Turkey or Romania,” he said. “We get the impression that our Ukranian partners have boarded a train called ‘cheap Russian gas’ and don’t know what stop to get off at. But we can go on like this for too long and even arrive at an impasse.”

But Kiev is determined to fight its corner and is threatening to seek international arbitration in Stockholm, Sweden.