EU to renegotiate South Stream gas pipeline with Russia

« We have been given a mandate by the member states to negotiate in their name with the Russian partners, » Oettinger said at a meeting of EU energy ministers in Brussels. The countries he is to negotiate on behalf of are Bulgaria, Croatia, Hungary, Slovenia, Austria, Greece and non-EU member Serbia, which applies EU laws in its energy sector, Oettinger said. The 2,380-kilometre gas pipeline is to stretch from southern Russia to southern Italy and will also supply gas to Greece and Austria from 2015. According to the EU’s executive in Brussels, South Stream inter-governmental agreements between Russia and transit countries breach several EU rules. For instance, Russian energy giant Gazprom would both provide the gas and manage the pipeline, while EU law calls for more competition. The pipeline is also meant to be only for Russian gas, while the EU requires that such projects be open to other companies. The commission additionally disagrees with how the pipeline’s tariffs will be set, saying that under EU law it should not be up to Gazprom, but an independent manager. It is not yet clear to what extent Oettinger will be able to negotiate on behalf of member states, or whether he will be joined by national representatives, commission sources said, adding that the deals will be negotiated in bulk. Construction on the pipeline has already started in Russia, Bulgaria and Serbia. The commission cannot halt this process, a spokeswoman said last week, adding that EU laws will only be breached once the pipeline begins transporting gas. Relations between the EU and Russia have been strained following the decision by Ukraine last month to delay a deal on closer ties with the bloc – a move widely chalked up to pressure from Moscow.