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  The Battle for Gas: Europe's Pipeline War

The Battle for Gas Europe's Pipeline War

By SPIEGEL Staff

Part 4: Freezing in Sofia

Bulgarians would only laugh about the environmental concerns of the Gotland islanders. After spending two weeks without heat in a cold January, as they did this winter after Moscow shut off its gas supplies, they can only welcome gas pipelines in any form in the future. Their only concern is that the valves on those pipelines are not shut off.

Bulgaria buys 95 percent of its natural gas from Russia. When temperatures there fell to minus 20 degrees Celsius (minus 4 degrees Fahrenheit) three weeks ago, the government instructed the population to heat only those rooms in their homes that absolutely had to be heated. "It is not right, turning the Bulgarians into hostages in such a conflict," said Prime Minister Sergey Stanishev, who until now has seen himself as Russia's strongest ally within the EU.

Dimitar Gogov, the head of the gas distribution company Bulgargaz, shares his prime minister's outrage. His office is in a dingy concrete building in the Lulin neighborhood of the capital Sofia. Gogov can count himself fortunate that the building is far from downtown Sofia, which has seen protests in recent days, partly because of the gas crisis.

Despite wearing a suit and tie, Gogov looks slightly disheveled. He has spent the last few days constantly on the phone with his counterparts in Romania and Hungary, begging for help. Western Europeans must have finally realized the importance of a common energy policy by now, he says. "We Bulgarians are pinning all of our hopes on a better connection to the Western pipeline system. Nabucco is now our first priority."

This represents a major shift in direction for the Bulgarians. They had originally agreed to support the South Stream pipeline, Russia's answer to Nabucco, which will pass through the Black Sea, enter their country and then continue to Austria, with branches leading to Greece and Italy.

But the recent Russian cutoff of natural gas shipments caused billions in economic losses to the new EU member. "We will consider whether to file claims for damages," says Gogov. He notes that Bulgaria paid the Russians on time for 40 years. "It took a long time to build trust, but that trust can be destroyed very quickly."

Confidence, not bitterness, is the prevailing mood on the island of Rügen, not far from Greifswald, where the Baltic Sea pipeline will first touch German soil. Harm Sievers, the managing director of the Fährhafen Sassnitz ferry terminal in the nearby port of Mukran, is also optimistic. Sievers, a former ship captain with tousled grey hair, is standing in front of a model of his small provincial port, and is practically bubbling with enthusiasm. "They're really getting involved here," he says. He is referring to Nord Stream's subcontractors, which are handling delivery, production and shipment of the gas pipes for the pipeline consortium.

About 20,000 pipes are already piled high in Mukran. A large industrial building behind the port authority is on the verge of completion. In the coming weeks, 220 steel pipes will be coated with concrete there. Harms sees this as a "revitalization of industry" on the island of Rügen. He does not share the concerns which are growing even among German politicians and experts that Putin and his cohorts could use natural gas as a weapon against Berlin one day.

Such fears are fueled by Gazprom's efforts to carefully control the shipment of its gas, including when it reaches storage tanks and pumping stations in Germany. Dubious legal structures are even being chosen to support those efforts -- the main thing is to make sure that German officials and competitors do not interfere with Gazprom's business.

The original plan, which would have called for transporting the gas from the terminal near Greifswald to redistribution points and storage tanks via a normal pipeline, has now been scrapped in favor of a transit pipeline. Under the new plan, the so-called OPAL pipeline will transport the gas -- if possible without any interruptions -- to a point just across the German-Czech border. From there, most of the gas will pass through the planned Gazela pipeline, which will run through the Czech Republic, to the border delivery station at Waidhaus in Germany.

This unusual design is advantageous for the operators, because German authorities will have very little influence over transport and distribution of the gas if it passes through a transit pipeline spanning more than one country. In this case, not even branch lines will be required. Regulations to encourage competition or to allow competitors to connect to the pipeline would be ineffective. For these reasons, competitors filed a number of lawsuits against the project a few weeks ago. In the suits, they provide evidence that Gazprom may not even be planning to ship additional gas to Germany, but instead may merely be intending to replace the gas that currently flows through Ukraine.

Such concerns do not seem to ruffle the feathers of executives at Nord Stream headquarters. Paul Corcoran, the project's chief financial officer, does not believe the costly Baltic Sea project will fail. "Otherwise we would not have made such a commitment."

At the headquarters of the Nabucco consortium in Vienna's Floridsdorf neighborhood, no one wants to discuss problems. Nabucco is "no anti-Russian project," says managing director Reinhard Mitschek. Everyone will be satisfied in the end, he adds, Russians and Europeans alike.

It sounds too good to be true.

FRANK DOHMEN, MANFRED ERTEL, UWE KLUSSMANN, CHRISTIAN NEEF,
JAN PUHL, DANIEL STEINVORTH, CLAUDIUS TECHNAU

Translated from the German by Christopher Sultan

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