During the reign of Vladimir Putin, the Kremlin has used state gas monopoly Gazprom as foreign policy tool to retain influence over neighbours. Since the Ukraine-Russia gas fights in mid-2000ies, energy security and reducing dependency on Russian gas, currently about quarter of gas consumed in Europe, has continually been on European agenda.
Editorial: the Russian gas gun
Despite that, Western-European leaders led by Germany have blinked green light to an extension of Nord Stream gas pipeline in Baltic Sea. For Russia, politics seem to trump profitability.
Meanwhile, liquefied natural gas – the LNG – carried into Europe by tankers comes at about the same cost as produce of Gazprom by pipes from Russia. The question arises: why do certain European politicians wish to increase dependency on Russian gas?
Officially, the only explanation has been that Russia is the only producer, currently, who is able to satisfy Europe’s need. Meanwhile, the ease with which Gazprom has hired former European top politicians, and its impressive army of lobbyists in European capitals, perhaps points to something else.
For the Kremlin, main thing seems to get rid of the middle-men. Read: cut the Eastern-European transit. Ukraine alone would lose some $2bn in fees.
More importantly, Nord Stream 2 will threaten energy security of Russia’s neighbours, the Kremlin gaining greater leverage for gas supplies based manipulation.