February 18, 2016 / 4:51 PM / 3 years ago

U.S. raises fresh concerns over Gazprom-led Nord Stream 2

BUCHAREST (Reuters) - A proposed Gazprom-led pipeline designed to boost Russian natural gas supplies to Europe came in for fresh criticism from the United States on Thursday, as an energy official said a reassessment should be on the cards.

Pipes are piled up at a storage area at French pipe coating company EUPEC in Sassnitz May 6, 2011. REUTERS/Tobias Schwarz

Russia’s Gazprom and its European partners last year signed an agreement on the Nord Stream 2 pipeline, designed to double gas volumes pumped from Russia to Germany via the Baltic Sea, avoiding traditional transit route Ukraine.

But most eastern Europe states and the United States argue the proposed pipeline could ultimately limit supply routes and the energy security of the European Union, as well as hurting Ukraine’s efforts to reform its economy as bypassing the country would deprive it of billions of dollars in gas transit fees.

“You can talk about it as a commercial project. But I think every country has to also look at Nord Stream 2 in the context of: does it meet the (EU’s) stated goals of diversification?” Deputy Assistant Secretary for Energy Diplomacy Robin Dunnigan said in an interview in Bucharest.

“And if it doesn’t, then I think countries would need to take a second look ... We’d strongly encourage countries considering new pipelines to evaluate those pipelines in that context.”

U.S. energy envoy Amos Hochstein said last September that, just like Russia’s previous plan for the South Stream pipeline that President Vladimir Putin abandoned in 2014, Nord Stream 2 is more about politics than economics. “It carries the risk of allowing Gazprom to cut off Ukraine,” Hochstein said in an interview in Washington.

Opposition was also stated last week by Polish Prime Minister Beata Szydlo, who said she was alarmed by the support of some European countries for the pipeline, warning that such a policy went against EU sanctions against Moscow.

Referring to the existing Nord Stream 1, Dunnigan said: “A new multi-billion dollar pipeline right next to one that already exists doesn’t seem to only have be a commercial project”.

Gazprom has partnered with E.ON, BASF/Wintershall, OMV, ENGIE and Royal Dutch Shell for Nord Stream 2.

Around half of the gas the EU imports from Gazprom is shipped via Ukraine.

Dunnigan said modernization work is underway on gas pipeline interconnections between Romania and Hungary to ensure two-way flow.

Similar gas connectors between Bulgaria and Romania - the least reliant state in the region on Russian gas, with onshore and offshore gas reserves in the Black Sea area - will be key to the European Union’s energy security, she added.

“The interconnector with Bulgaria and ... with Hungary, making that bi-directional, will be absolutely essential to creating a real integrated gas market here in this region.”

Gazprom chief Alexei Miller said on Saturday he had no doubt Nord Stream 2 would be implemented on schedule by the end of 2019 and laying pipes would start next year.

Editing by David Holmes

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