Europe needs eastern gas links to curb Russian dominance: US

BUDAPEST-Reuters

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U.S. energy envoy Amos Hochstein urged southeast European states to build new gas links and focus on smaller projects to curb reliance on supplies from Russia, rather than blockbuster pipeline deals.

States in the region such as Hungary, Serbia and Croatia are looking to boost energy security following the collapse of the Kremlin-backed South Stream gas project that would have carried Russian gas through a pipeline bypassing Ukraine.

An alternative floated by Moscow, the region’s dominant supplier, would be Turkish Stream. It would pump gas originally planned for South Stream into Turkey and then possibly north into southeast and central Europe via new gas links.

“It is hard for me to understand the difference between Turkish Stream and South Stream outside the name and a slight deviation of the route,” Hochstein told an energy conference on late March 19.

He said the region, which depends on Russia for almost all its gas, faced risks by looking for “easy magic bullets” which distracted attention from separate, smaller projects.

Hochstein said Russia would remain a “critical player” in European gas supplies, but other energy sources and routes were needed to boost security.

He said improvements in infrastructure were needed, possibly with European Union help, to ensure gas from elsewhere, such the Trans Adriatic Gas Pipeline (TAP) scheduled to carry Azeri gas to Europe by 2020, gets to the region.

Connections between Greece, Bulgaria and north into Romania, Hungary and Serbia via pipelines capable of so-called reverse flows of gas were far cheaper than rival “mega projects” and were “eminently doable,” Hochstein said.

He said U.S. officials have had several discussions with the new Greek government about putting a floating liquefied natural gas terminal in Thessaloniki, so the link between Greece and Bulgaria does not depend on the Southern Corridor project.

The Southern Corridor is designed to improve the security of the European Union’s energy supply by bringing natural gas from the Caspian region.

Hochstein also urged Croatia to build an LNG terminal on Krk island, which he said should be a top priority for Europe.

“If you get the combination of the support that the EU can give, that’s where the banks will come in and some American companies as well as other companies are going to come in. I think Krk island is closer today to becoming a reality.”