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South Stream Turning Into Stumbling Block between Russia, EU
June 25, 2014 15:13

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The EU demands that the South Stream project must be put on hold until it meets the requirements of the EU’s Third Energy Package, another move in a protracted politicized chess war of attrition.
The statement comes as the bloc is teetering on the brink of an economic war against Russia over its alleged involvement in the Ukraine crisis.
According to Guenther Oettinger, the EU’s energy commissioner, Gazprom must comply with the Third Energy Package in implementing its southern pipeline project aimed at taking Ukraine out of the gas transit chain. The legislation bans energy  producers from owning transit pipelines.
However, in light of pressing energy needs, individual member states are reluctant to come to grips with political pressure. They need inexpensive and reliable supplies and there is no viable alternative to Gazprom at the moment.
While Bulgaria bowed to the commands from Brussels, Austria remains defiant. During the presidential visit to Vienna, the two countries signed a deal to establish a joint venture to construct the South Stream oil pipeline project on the territory of Austria. Even Austria’s president, Heinz Fischer, was reported to have ‘rejected US and EU criticism’, according to Deutsche Welle. Despite a statement issued by the US embassy in Vienna that was supposed to discourage the deal, Fischer spoke in favour of the gas route and opposed further sanctions against Russia. It’s worth noting that Austria was the first western European country to secure a gas supply deal with Moscow in 1968.
The contract on South Stream Austria was inked by Gazprom’s chief Alexey Miller and the CEO of OMV Gerhard Roiss. OMV, formerly known as Österreichische Mineralölverwaltung, is a Vienna-headquartered international oil and gas company whose main businesses are exploration and production of oil and gas, natural gas distribution and power generation, and refining and marketing oil products, according to its page on Wikipedia. “With group sales of €42.41 billion, a global workforce of 26,800 in 2013 and a market capitalization of € 11.35 billion (end of 2013), OMV is the largest listed manufacturing company in Austria,” reads the Wikipedia page.

South Stream is to be built by German Wintershall Holding, French EDF, and Italian ENI so any suspension in the works might hit the European business community in the same way as Gazprom. 

Author: Mikhail Vesely

Tags: South Stream Nord Stream Russian gas Gazprom EU sanctions 

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