Baltic States – CIS, Energy, EU – Baltic States, Gas, Legislation, Transport

Gazprom would continue to pressure the EU to lift restrictions on its use of the Opal pipeline meant to transport gas from a northern German landing point for Nord Stream's Siberian gas to the Czech Republic, Alexander Medvedev said.

"This results in Nord Stream being only half full, while in the winter we have had to use gas from storage to reach our customers," he told reporters, in the latest complaint by the Russian company against EU efforts to stop suppliers from dominating transport networks.

"We hope that reason and logic will prevail as pipelines should not lay idle. It is also a precedent for South Stream," he added in reference to the pipeline Russia is building under the Black Sea, due to be completed by 2015.

‘We hope that reason and logic prevail, as pipelines should not lay idle.’ 

Gazprom's access to the 470-kilometer Opal pipeline is limited because of the EU's 3rd Energy Package legislation, which aims to prevent firms that already dominate supply from dominating transport networks too.

The combined capacity of the Nord Stream pipeline is 55 bcm a year, but Gazprom, which heads the consortium of shareholders, has been pumping only half that.

However, there are other reasons why Gazprom's business might be suffering, other than regulation, and indicated by the fact that no one else is using Opal.

An oversupply of gas globally, customer demand for lower prices and competition from origins such as Norway have also been posing challenges. Medvedev said Europe's renewable energy expansion and the rise of gas hubs that trade short-term gas undermined the role of Gazprom's pipeline gas as well.

Gazprom believed that by 2020 there would be additional gas demand of 60 to 80 bcm per annum, as Europe's domestic resources were shrinking, he said.

One of the LNG ventures was to be at the Tambei fields, where gas reserves are estimated at 1.56 trillion cubic meters. But in April Gazprom announced that the company would most likely produce LNG there without the assistance of Novatek. It is not clear if a long-running dispute between the two companies has affected the negotiations on the joint ventures.