Wednesday, September 19, 2012

Malatinsky and Medvedev talked about past successes, current tensions and future perspectives



On Tuesday (September 18) Bratislava hosted a ceremonial conference „Central European Gas – Oil Transmission Corridor“. Discussions among leaders of Slovak gas and oil industry and business partners particularly from Russia focused on long-term experiences and further perspectives of cooperation.

The event took place to celebrate the 50th anniversary of launch of international Druzhba pipeline, 45th anniversary of Brotherhood pipeline and 40th anniversary since the launch of first gas transit line through Slovakia.

The Minister of Economy Tomas Malatinsky emphasized the position of Slovakia as a transit country for oil and natural gas from Russia to Europe. The present pipelines proved their high reliability and security.

“However, today apart from these East-West routes there is also a current question of question of constructing North-South connections and securing the reversibility of the fuels,” Malatinsky said.

Alexander Medvedev, Deputy Chairman of Gazprom, spoke about stability these projects have proven in spite of political changes, such as dissolution of the Soviet Union and Eastern bloc.

“Demand perspectives are great,” he said at a press briefing. “We are able to supply as much gas as the Europe will ask for.” Medvedev added that Russia will use the old as well as new transmission corridors.

Bilateral and long-term contracts

In Bratislava the Gazprom representative also commented on current tensions with the EU.
"When we look at the price setting to the long-term contracts, I would like to remind you this system has been working for more than 40 years." He explained that the system reflects the interest of both the buyer and sellers.

Medvedev also pointed to periods when spot prices of gas were higher than those agreed in their long-term contracts and in that time nobody asked them to shift to spot prices. "I'm sure the old system will confirm its sustainability and viability in the future," he added.

Asked to comment on the proposal of increased role of the European Commission in bilateral negotiations and deals between EU member states and third parties in the area of energy, Slovak minister Malatinsky underlined that the EC enforces the interest of the whole European Union.

He understands the EC demand as legitimate but on the other hand he also understands the Gazprom position. “There will be conflicts in the future, too.”

Communist character

Medvedev reacted that he has also heard many exotic ideas but the current EC approach and push for united price on gas purchase reminds him of “communist character”. He referred to political decisions on price of shoes or salami in the former Soviet Union. Such an approach ignores the market functioning and is based on political speculations, he commented.

According to Medvedev, the European energy market is still in its beginnings and there is a difference between integration and regulation. Medvedev also explained that due to strategic position of the company and protection of Russian economic interests all questions from EC will be addressed to a special authorized body appointed by the Russian Government.

Trans-European connections

The pipeline operators are planning several projects to further integrate Slovakia into European energy map. With regard to oil the main discussions focus on construction of Bratislava-Schwechat Pipeline that would transport supplies to Austrian refinery and enable reverse flow as well. Another option to diversify supplies is better use of existing connection between Druzhba and Adria pipelines and modernization of the route. 

In his keynote address minister of Economy stressed that Slovakia actively participates in current EU activities of trans-European energy infrastructure and creation of regime for projects of common interest in gas sector. 

“Slovakia will continue to intensify activities on national and international level in the interest of maximization all measures needed to secure sustainable development in energy sector,” minister Malatinsky said.

In the framework of regional investment plan for 2012-2021 the Slovak gas transmission operator proposed three projects to be implemented in the future – modernization and upgrade of network and replacement of technologies due to environmental norms (commissioning in 2010-2016), Slovakia – Hungary interconnector (2015) and Slovakia-Poland interconnector (2020). The latter is specified as project of common interest according to EU rules.

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