Page 5 - Sample PRO weekly report Poland

Exposing the self interest at the heart of the Visegrad Group, the Czech Republic is already in the bag, thanks to the fact that it is promised a role as a gas hub. Over 50bn cm arriving via Nord Stream 2 would be piped to the country, the bulk of it set to be sent onwards. Prague has largely remained silent while its neighbours have raised a hullabaloo.
As the operator of the mainline between Ukraine and Western European hubs, the Czech’s Visegrad peer Slovakia is the most directly exposed member state to the Russian plan. However, Bratislava has remained relatively restrained in its criticism of Nord Stream 2.
Transmission system operator Eustream has long noted a ‘ship or pay’ clause in its contract with Gazprom running until 2028. The Russian company announced in April, however, a deal reportedly worth €5.3bn that extends the agreement to 2050.
To the north, Russia is also seeking to buy off Latvia. However, Riga rejected in late April an offer that would hand the Ventspils Port a deal worth around €25mn for a role in building Nord Stream 2. While the size of the offer is small fry, it lit a fire under Aivars Lembergs, the combustible mayor of Ventspils, who is also the major shareholder in the port and a prominent leader for Latvia’s large ethnic Russian population.
On the other hand, Poland and Lithuania - which retain the most hawkish stance on Russia in Europe - will get nothing from Gazprom. The pair have both already opened their own LNG terminals to mark their intention to fight the leverage that gas hands Moscow.
However, despite bullish claims from both, they are unlikely to be able to dispense with Russian gas any time soon. Gazprom supplies 70% of the 16bn cm Poland guzzles each year and aside from the small volumes that are imported via Lithuania's LNG terminal, remains the only gas seller in the Baltic states.
The pair are spending billions on accessing alternative supplies that arrive with a higher price tag than Russian gas. Jumping wholeheartedly into the EU strategy would be a cheaper alternative, and earn greater leverage.
In fact, the stance of Poland’s nationalist PiS government is actually a boon to Russia at times. Incensed by the potential Czech role in distributing gas from Nord Stream 2, Warsaw delayed a plan to build a new cross-border link late last year, while it has also postponed an interconnector which would finally plug the Baltic states into the EU network to help end the isolation bequeathed by their Soviet history.
Soft power
Yet, as the compromise deal with Gazprom hints, the EU may have little choice but to shift its strategy to accept that Nord Stream 2 will eventually make land in Germany, and try to pull CEE states into line with the Energy Union.
The key question for the EU’s ability to block Nord Stream 2 is whether the pipeline is a commercial or a geopolitical project. The short answer is that it is both; the project is commercial for the European companies involved, but undeniably political given the Kremlin’s urge to punish Ukraine.
“From the perspective of the private European companies involved in the project, Nord Stream 2 is clearly seen as a commercial activity,” wrote Severin Fischer of the Centre for Security Studies at ETH Zurich in a report last year. “From the side of ... Gazprom, it certainly has a geopolitical dimension. Whether Nord Stream 2 is a geopolitical threat or not, depends a lot on the perspective one has on the EU: is it one single market or are there 28 national consumers competing against each other?”
The long answer is a tangle of legal loopholes, realpolitik and geopolitical lobbying. The EU may be able to block the project, either via member states’ territorial rights in the Baltic Sea, or by putting its foot on the pipe
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