Russian President Dmitry Medvedev and German Chancellor Angela Merkel launched the Nord Stream gas pipeline on Tuesday, November8, starting delivery of Russian natural gas to Germany bypassing existing transit countries, including Ukraine.

The ceremony to open the symbolic white tap of the gas pipeline in the town of Lubmin in northern Germany was also attended by Dutch Prime Minister Mark Rutte and French Prime Minister Francois Fillon.

"This is a long-awaited event which signifies the strengthening of relations between Russia and the European Union. This event will enhance the security regime, including energy security in Europe," President Medvedev said at a news conference.

Russian natural gas and the electricity produced with it will "make the life of a large number of people more comfortable," Medvedev said, adding he hoped the European economy and gas demand would grow.

'We expect that the economy of the European Union will be able to overcome all current difficulties and attain steady growth, after which annual additional requirements of our European partners for gas may increase to quite high levels by 2020 - to 200 billion cubic meters, according to expert estimates," he said.

Natural gas transportation via the first stage of the Nord Stream pipeline will reach its full capacity of 27.5 billion cu m as soon as 2012, Gazprom Deputy CEO Alexander Medvedev said.

"In 2012, the first stage of Nord Stream will transport up to 27.5 billion cu m. Specific volumes will depend on customers' requests but the contractual volume for 2012 is 27.5 billion cu m," he said.
The pipeline will deliver Russian gas via the Baltic Sea to Germany, bypassing key transit countries Ukraine and Belarus. Gazprom's Medvedev said the company would not cut gas transit via Belarus after the launch of Nord Stream.

Russia currently provides almost 30 percent of the gas consumed in Europe.

The $11-billion Nord Stream project includes two roughly parallel pipelines with an overall annual capacity of 55 billion cubic meters.

Russia's gas giant Gazprom, which holds 51 percent in Nord Stream, has already signed long-term gas contracts via the Nord Stream pipeline with several European countries, including Germany, Denmark, the Netherlands, Belgium, France and Britain.

ForUm asked opinions of experts whether the launch of Nord Stream will affect Ukraine's status of transit country and how badly.

Dmytro Marunich, director of energy research Institute:

- The Nord Stream pipeline was build for gas supplies to North Europe, while Ukraine transits gas to Central and South Europe. I believe it will result in insignificant reduction of transit, by 5-10% maximum. The problem is that Gazprom gets an opportunity to manipulate gas flows and consequently gets leverage over transit-counties and countries-consumers.

Europe's benefit from the alternative pipeline is to secure stable delivery. In case of an accident on one of the routes the gas will be delivered through an alternative one. It is very good for consumers.

If EU authorities observe the principles of the 3rd energy pack, Gazprom won't be able to dominate on the market and Nord Stream can be considered as geopolitical project, which enables Russia to realize its ambitious projects with European partners.

Velentyn Zemlianski, expert on energy issues:

- When the construction of Nord Stream started, it was declared the project was being built for small deposit, and that Nord Stream would not concern Ukrainian transit. By the end of construction it was declared the gas for Nord Stream would be taken from the volumes passing through Ukraine. Such an interesting change of positions.

Anyway, Ukraine might lose certain volume of transit, about 20 milliard cu m per year, but Ukraine has underground storage facilities, which means Ukrainian route of gas transit will exists always.

It does not matter how many alternative routs they build, but minimum 60-70 milliard cu m annually will pass via Ukraine. Such volume cannot be transited through alternative routes, because none of them has underground storages, which keep the pressure in the gas pipeline during maximum load.

With the help of Nord Stream, Europe wants to insure against possible crises between Ukraine and Russia. Russia in its turn wants to maintain certain tension in relations with Ukraine so Europe keeps financing other projects, including South Stream.

Anatoliy Baranov, independent Russian political scientists, deputy head of Institute on globalization issue:

- In this situation Russia wants to minimize political and economic risks, though there are grounds to believe this project will become more sacrificial than any agreements Russia might ever conclude with Ukraine.

In this case, I believe the matter concerns rather political risks, even if such policy is economically irrational.

As an example I want to cite recent dialogue between Medvedev (Russian president - ed.) and current IMF head Christine Lagarde, during which Medvedev promised 10 milliard USD of support for financial system of the EU.

Russia itself needs this money, and moreover this amount would cover any benefits, which Kremlin can offer to Yanukovych, and which Ukrainian president could ever wish for.

But instead Russia pays Europe's tranquility due to traditional gas conflict between Ukraine and Russia at the end of a year.

From the point of view of a normal person, it is rather strange policy, but not stranger than any other policy, which includes hidden agenda.

We don't know what back-door affairs bind Putin, Merkel, Sarkozy, Berlusconi and others. We can only reasonably assume that such affairs exist. I am sure that if the matter had concerned some local bosses, law enforcement authorities would have revealed the plot. But when the game includes such high-ranked officials, law enforcement hand is short.

Honestly, I would consider this Nord Stream project through the lens of all-out corruption, which includes not only Russia and Ukraine, but Europe as well.

Valery Borovik, head of 'New energy of Ukraine' alliance:

- In fact, with the launch of Nord Stream Ukraine does not lose that much transit volume, as some Russian editions predict, because this project will transport energy supplies from sources, which do not concern Ukraine.

For Europe the Nord Stream project is diversification of ways of gas delivery, not of its sources. Due to unstable gas supply during gas conflict between Ukraine and Russia, Europe psychologically ties gas supplies with Ukraine-Russia conflict. With Nord Stream Europeans just secure stable gas delivery.

Oleksandr Paliy, expert and political scientist:

- This project excludes first of all such transit countries as Poland and Belarus, but does not effect Ukraine much, as our pipeline is oriented to South European consumers.

Ukraine will remain the main transit route for Russian gas to Europe. Instead of 80% there will 70% - not very serious changes. Russia has signed long-term contracts with South Europe, and it cannot realize them by means of Nord Stream. Here comes Ukraine, so there is no reason to be afraid of this Nord Stream.

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