Page 4 - Sample PRO weekly report Poland

opponents of Nord Stream 2 that it will simply increase dependence.
On the one hand, Russia hopes that boosting its supply of relatively cheap gas to the EU will help kill off the development of alternative sources such as LNG. However, it also weds Gazprom to its EU customers, offering them greater leverage on price if they stick together.
“Gas supplies are extremely dependent on costly infrastructure, delivered ... via expensive pipelines,” noted the European Bank for Reconstruction and Development (EBRD) in late April. “Only working across borders can ensure that a country avoids being dependent on a single supplier of gas. Having access to a regional gas market means access to various suppliers who are competing to provide the best price. It also means better security of supply.”
The European Commission sent a letter to member states in March inviting them to voice concerns over Nord Stream 2, but also seeking a mandate to negotiate an agreement with Moscow over applying a legal regime on the offshore section. However, Brussels did not say it would seek to block the project, which is what many CEE member states would like to hear.
Instead, facing opposition from Moscow and Berlin, the commission appears to be carefully picking its fights. If the EU can’t halt Nord Stream 2, it could let Russia hoist itself by its own petard, and encourage greater unity amongst member states into the bargain.
Financial analysts covering Gazprom have cautioned against the Kremlin- driven strategy to build an additional pipeline into Europe for years. The financing deal announced on April 24 was welcomed because it will “spread some of the project risks and ease pressure on the gas giant’s capex programme over the next few years,” wrote VTB Capital.
“The ability to share costs with partners is positive for Gazprom ... given that Nord Stream 2 will lead to a decrease in the value of the company,” noted BSC Equity.
Many CEE states howled with fury when the EU surprised with its compromise deal with Gazprom over the competition probe. However, the official green light for cross-border trading is a huge step towards reducing Russian leverage. It would allow virtual gas trading, meaning member states from the Baltic to the Adriatic could sell spare Russian gas anywhere in Europe.
Hand in hand with continued EU efforts to push CEE states to improve links across the region, that breaks Russia’s ability to wield its dominance of gas supply as a political weapon. During the gas wars in 2006 and 2009, some CEE states froze, while the likes of Poland and Slovakia were punished with lowered deliveries in 2015 as they sent gas to Ukraine. Under the new contract commitments, Russia would need to cut supply to the whole EU in order to reduce the volumes received by certain states.
The EU is acting swiftly to shore up the security of member states. On April 27, the European Parliament announced an deal with the European Council on new rules that open the way for countries to demand help from the rest of the bloc in case of a supply cut. The measure "will make us more secure and resilient to external disruptions and to the abuse of energy supply as a political weapon," stated rapporteur Jerzy Buzek, a former Polish prime minister.
Split
Still, Moscow continues to work at its favourite tactic of splitting individual states from the EU line as it pushes the new pipeline.
“Nord Stream 2 is yet another Russian effort to “divide and rule” in the European energy space, just what the ‘solidarity’ of the Energy Union was meant to avoid,” according to Douglas Hengel at the German Marshall Fund.
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