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For one this is the pipe, for the other - the mother: Gazprom is building new pipelines in Germany
17 July 2020, 09:37
For one this is the pipe, for the other - the mother: Gazprom is building new pipelines in Germany
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The construction of the new Eugal gas pipeline in Germany is at the finish line now. The first string has already been put into operation, the second will be ready by the end of the year. This is a continuation of Nord Stream-2 in Europe, the construction of which is suspended.

Yelena Ivanova

In early July, the German parliament decided to abandon coal-fired power plants after 2038. After Germany leaves nuclear power, gas remains the only stable source of energy, authorities say. And since pipeline gas remains the cheapest, gas in Germany is mostly Russian.

Unlike Nord Stream-2, there are no construction problems with the intra-German energy projects. Nordstream -2 stood up, and its continuation on the territory of Germany itself is actively under construction. The first Eugal line - the so-called gas pipeline - was already commissioned at the end of last year. The second should be ready in December 2020.

Five years ago, the owners of the pipeline - the German concern Wintershall (the energy subsidiary of BASF) and the Russian Gazprom - planned to spend 1 billion euros on 480 kilometers of the pipeline from the Baltic to the Czech border. Actual expenses tripled. This pipeline runs parallel to another pipe - Opal, which was built by the same partners. However, Opal came under antitrust investigation, and the European Court banned its 100% load.

It was a heavy blow for Gazprom. The new pipe is regulated only by the German government, so European troubles do not threaten it. And even the cost of not building it in the “three ends” is not a problem, the Gascade company , which is building and will operate the new pipeline, said that it was 80% loaded for 17 years in advance. True, it is not clear what gas is meant. If this is gas from Nord Stream-2, then the timing when it will go into operation has not been determined.

New pipelines have many supporters and opponents. The governments of the federal states on whose territory the pipes are laid are pleased with new jobs and taxes. The federal government hopes that the Eugal pipeline will stabilize gas supplies not only along the North-South axis, but throughout Germany’s gas network. According to Deutsche Welle, Gascade refuses to talk about US sanctions. “Since the company is not affected by sanctions, we have the role of an observer”, - its spokeswoman said.

Experts say that Nord Stream - 2 became toxic due to sanctions, so Gazprom will have to finish building it itself. And this will increase both the time and costs. In addition, Ukraine will have to pay further. If we summarize the costs of modernizing the Russian offshore pipelayer, lost revenues from the sale of gas and payment of transit through Ukraine, the losses are serious.

Germany itself also has voices against rampant pipe construction. According to the German Institute for Economic Research, the construction of Nord Stream-2 has now lost its economic meaning. Claudia Kempert, an energy expert at the institute, explains that large pipelines pay off if they are used for decades. But this is unlikely, based on their Climate Program of the European Union. The EU has set itself the goal of reducing gas use. “In Europe there are enough free transport capacities, in many countries there are terminals for liquefied gas. With declining demand for natural gas, existing pipelines could be used, and it makes no sense to pull a new string”.

And of course, environmentalists do not feel much enthusiasm for new gas projects. In March of this year, the Brandenburg court rejected the claim of journalist Malta Heinen, who tried to ban the commissioning of Eugal. The journalist himself says: “I was hoping that the court would limit the power of the gas lobby. The gas industry itself writes predictions about future gas consumption in Europe, and on this basis it itself is further upsetting gas networks. The authorities do not check these forecasts, I was convinced of this by reading the case file. The giant Eugal pipeline will force us to burn gas for decades and increase our carbon footprint”.

Environmental defenders claim that both Eugal and Nord Stream 2 is a step in the wrong direction. Energy companies should not dictate to the authorities what infrastructure projects need to be built. The journalist does not want to give up. After waiting for a written decision of the court, he will decide what steps he will take.