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Moscow's bid for new gas bridgehead

Friday, March 06, 2015 - 02:25

The latest threat to Europe's gas supplies recedes for the time being as Russia and Ukraine make amends in their payment dispute. But is gas now Russia's lever of choice for applying pressure on the West? Hayley Platt reports.

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For decades, Russia's run a virtual monopoly on supplying gas to southeast Europe. Most of that gas routed through Ukraine. But tensions over the crisis there has made the supply route unreliable. Moscow has turned off the taps three times over the past decade. The latest threat to Europe's supplies has been averted - after Ukraine paid $15 million dollars to resolve a dispute over payment. But has left some asking: is Russia exporting influence as well as energy? Europe specialist, Mike Gallagher of IDEAglobal, points to Europe's recent moves to broker a Ukraine ceasefire. SOUNDBITE: Michael Gallaher, Director of Research, IDEAglobal, saying (English): "Europe is very dependent on Russian gas and can't easily diversify and I think that's why there's an oilve branch coming from Germany and France. They realise that that is the case. The kind of harder line view in the US is not the consensus in EU circles." Russia's planned $40 billion South Stream gas pipeline project would have shipped gas into Europe via Bulgaria. It was cancelled last year following objections from the EU. Now Moscow is looking for new routes, also bypassing Ukraine. One the focus of recent talks between Vladimir Putin and Hungary's Viktor Orban. (SOUNDBITE) (Russian) RUSSIAN PRESIDENT, VLADIMIR PUTIN, SAYING: "I believe that the groundwork that we have developed with our Hungarian partners can be used while we extend co-operation with our Turkish friends and create the so-called Turkish Stream. " The "Turkish Stream" would feed gas through Turkey, Greece, Macedonia and Serbia, then into Hungary and perhaps on to Austria. Michael Labelle of Hungary's Central European University. (SOUNDBITE) (English) ASSISTANT PROFESSOR OF ENERGY AT CENTRAL EUROPEAN UNIVERSITY, MICHAEL LABELLE, SAYING: "South Stream may in name have been cancelled and the landing point at the Black Sea has been changed but really the intent of that and the purpose of that has not changed and that's really to maintain Russia's strong gas dominance in the region." One major question mark over the Turkish Stream project: who will pay for it. Russia, cut off from Western capital by sanctions, may struggle to do so. The countries on the route are also cash-strapped. And quite apart from the issue of how it would square with EU sanctions against Russia, Brussels has criticised the scheme as flawed - and in breach of legally binding contracts.