* South Stream pipeline, Yamal LNG rely on western
* EU proposes to target sensitive technologies in energy
* Pipelines, wells, drilling platforms are listed
By Henning Gloystein and Barbara Lewis
LONDON/BRUSSELS, July 24 The European Union's
proposed sanctions against Russia, targeting sensitive
technology, take aim at Gazprom's huge South Stream
gas pipeline project to Europe and Novatek's Arctic
Yamal liquefied natural gas (LNG) facility.
A draft proposal outlines a package of targeted measures in
the areas of access to capital markets, defence, dual use goods
and sensitive technologies, EU diplomats said on condition of
It makes clear any measures should not affect current energy
supplies and that sanctions should be reversible.
But the list, if enforced, would delay major energy projects
in the pipeline sector, which Russia dominates, and the
fast-growing global liquefied natural gas (LNG) market, in which
Russia is so far not a big participant.
The diplomats said the EU was considering restricting
Russian access to piping used for building oil and natural gas
pipelines, drilling pipes to extract oil and gas, floating or
submersible drilling platforms, as well as floating cranes and
That would likely halt or delay development of Gazprom's
South Stream pipeline, planned to pump 63 billion cubic metres
(bcm) of natural gas a year, equivalent to 15 percent of
European demand, via the Black Sea into the EU later this
decade, cementing Russia's position as the region's dominant gas
"If Europe's engineering partners are prevented from work
on any of the big Russian oil or gas projects because of the
sanctions, they are almost certainly going to be delayed," said
one advisory source that works on Russian energy projects.
Gazprom's main partners in South Stream are Italy's Eni
, France's EDF, Austria's OMV and
Germany's Wintershall, which is a subsidiary of German
chemical giant BASF.
Already, the European Commission, the EU executive, has
suspended negotiations on making South Stream conform with EU
South Stream relies heavily on European know-how to be
built, such as through a contract with Italy's Saipem
to work on one of four parallel South Stream pipelines due to
cross the Black Sea.
The proposed sanctions would also likely hit Novatek's Yamal
LNG export project.
Novatek's main partners in the project are France's Total
, a specialist in deep-sea drilling, and China's CNPC.
French oil services company Technip, which won the
engineering, procurement and construction contract for Yamal LNG
last May warned earlier on Thursday about the risk that
sanctions against Russia could interrupt income flows from the
Siberian project, sending its shares down more than 8 percent.
EU diplomats were meeting on Thursday to debate tighter
sanctions, but were expected to meet again next week before
taking any final decision.
Energy Commissioner Guenther Oettinger said on Wednesday
that the EU should not give Russia technical help to develop
Arctic oil and gas fields if Moscow failed to help to defuse the
Novatek, which has seen one of its shareholders hit by U.S.
sanctions, is the main developer of the Arctic Yamal peninsula
LNG export project, which plans to export 16.5 million tonnes of
LNG a year.
The project's gas is so far in the Arctic North that it
requires the use of specialised technology, often provided by
(Additional reporting by Michel Rose in Paris, editing by David
Evans and William Hardy)