Europe seeks alternatives to Russian energy supplies

The European Union should improve access to gas from the Caspian region, coordinate supply problems among member states, and keep a closer watch on oil stocks, according to a report by the EC.

Eric Watkins
Oil Diplomacy Editor

LOS ANGELES, Nov. 11 -- The European Union should improve access to gas from the Caspian region, coordinate supply problems among member states, and keep a closer watch on oil stocks, according to a report by the European Commission to be issued later this week.

"A southern gas corridor must be developed for the supply of gas from Caspian and Middle Eastern sources…this is identified as one of the EU's highest energy security priorities," said a draft of the EU's Second Strategic Energy Review.

The 27-member bloc is seeking to reduce its reliance on Russian gas after pricing disputes between Russia and transit states disrupted supplies in recent years and Russia's invasion of Georgia in August increased tensions.

Russia already supplies 42% of the EU's gas, and Moscow—seeking to increase its sway over the EU—is competing hard to buy up volumes in North Africa and Central Asia.

Seeking commitments
European Energy Commissioner Andris Piebalgs last week visited Turkey and Azerbaijan, seeking to smooth the way for supplies of Caspian and Central Asian gas to reach Europe directly instead of passing through Russia (OGJ Online, Nov. 10, 2008).

The EC will seek firm gas supply commitments from Azerbaijan and Turkmenistan, and will look at creating a consortium for buying Caspian gas, said the review, which will be published Nov. 13.

Although the EU has a variety of gas suppliers, including Russia, Norway, Algeria, and other countries, some individual member states are particularly dependent on a single supplier, such as the Baltic countries' dependence on Russia.

"Strategies to share and spread risk and to make the best use of the combined weight of the EU in world affairs can be more effective than dispersed national actions," the draft report said.

In the commission's view, EU nations also could improve the security of their supplies by strengthening infrastructure.

"Connecting the remaining isolated energy markets in Europe is a priority," the report said, adding that the commission would develop plans next year for linking the Baltic countries' energy infrastructure with the rest of the bloc.

The commission also plans to draft an action plan for LNG infrastructure, study the possibility of an offshore wind park in the North Sea, and look into methods for improving links between Europe and countries along the southern Mediterranean shore.

The EC draft report also recommended that both strategic and commercial oil stocks be better managed.

Contact Eric Watkins at hippalus@yahoo.com.

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