THE NEW UKRAINE (La nuova Ucraina)

Gazprom on Wednesday opened a new pipeline across Lithuania that will allow the Russian gas company to increase supplies to Kaliningrad, a Russian exclave between Lithuania and Poland.

It will also allow Gazprom to boost natural gas supplies to Lithuania, which is braced for an energy deficit after it closes a Soviet-era nuclear plant in December.

The opening of the pipeline — dubbed Red Junction — took place amid much fanfare near the Susepe River, located on the border between Lithuania and the Kaliningrad region.

The pipeline stretches 139 kilometers (86 miles) and will have a total annual capacity of 2.5 billion cubic meters of natural gas. Valery Golubev, Gazprom's deputy CEO, said the pipeline would allow the company to double gas supplies to the Kaliningrad region.

Viktoras Valentukevicius, head of Lithuania's gas company Lietuvos Dujos, said the pipeline was essential for the Baltic state.

"Natural gas will become a key energy resource for our country for decades. This line is very important for Lithuania as a guarantee of stable energy supplies from Russia," he said.

Lietuvos Dujos is 38.9 percent owned by Gazprom, the world's largest natural gas producer.

Many Lithuanians are apprehensive about the increasing reliance on Russian gas that the new pipeline signifies. In December Lithuania will shut down its Soviet-era reactor in Ignalina, which practically overnight will transform the Baltic state of 3.4 million people from a net energy exporter to an energy importer.

Since the country has no direct link to the European electricity grid, it has no choice but to import more energy from Russia.

But Moscow's snap decisions in the past to cut off supplies to Ukraine and Belarus, make many Lithuanians fear that Russia is an unreliable energy supplier.

"Vilnius should not forget that the Kremlin is using Gazprom not only as economic, but also a very efficient political tool," said Raimundas Lopata, director of the International Relations and Political Science Institute in Vilnius.

Gazprom said it expects to make the first shipments of gas in the new pipeline in December.
(Kyiv Post)

SUSPICIOUS SILENCE. (Silenzio sospetto)

The recent signing of the Nabucco pipeline project is definitely a political rather than economic deal. Its feasibility, the probability of its actual construction and its profitability aside, the deal shows clearly that, at least for the present, those who want to see a weaker Russia prevail over those who would rather see it strong and an integral part of the West. It is also obvious that without heavy Washington lobbying the Nabucco pipeline would never take off. Since there is practically no economic interest for the U.S. in it, Washington politics make the direction of the much advertised "reset" quite uncertain.

In the last 20 years since the collapse of communism every U.S. president has kept repeating that it is in American interests to see Russia as a strong, democratic, and prosperous nation. But actions rarely suit the words. Washington needs, and often gets, Moscow’s cooperation on major security issues, but then it turns around and does its damnedest not only to prevent “non-democratic” and “authoritarian” Moscow from becoming an energy superpower, but to make sure that it gets as little cash as possible -- by diverting this cash to former Soviet republics where democracy is so rudimentary as to be barely discernible, while Oriental despotism, sometimes hereditary, is very much in evidence. So much for the hugely advertised U.S. democracy promotion mission.

OK, let us forget about democracy and get to real things. Has in the end Russia lost this round? What about another important problem for Nabucco - the Iranian connection? It is more or less obvious that this new pipeline will be extremely difficult to fill. If one excludes Russian and Iranian gas it would be practically impossible to do. That is why Turkey insisted that both Russia and Iran should be on the list of gas suppliers but then the whole idea of Nabucco of eliminating Russia from the supply equation did not materialize. Pretty soon the Nabucco lobbyists will have to face squarely some unpleasant questions: Why we should spend billions to enrich Iran or Russia? The next question will be what if both Russia and Iran say that they are not interested since they already have other gas delivery contracts through different routes? Will Nabucco actually bring Russia and Iran closer together to manipulate not only the gas supply line but geopolitics?

Russia provided so much help to U.S. and NATO in Afghanistan. It can do a lot more in Iran since practically the whole Iranian nuclear program is dependent on Russia, which makes RF the best guarantor of it being used for peaceful rather than military purposes.

Of course, Russia made a mistake in accepting Ahmadinejad’s claim for victory in the recent elections a bit too soon. The Iranian opposition is not crushed yet, and the final outcome is not too certain. More and more political leaders and even mullahs are switching sides. The Kremlin would be well advised to show some restraint or at least neutrality, to avoid a future backlash.

Another interesting observation is that Ukrainians, Poles and Balts are suspiciously quiet. They were quite vocal in protesting against the Nord Stream Project to connect Russia with Germany through the Baltic Sea. Ukraine was the most vocal opponent since Nord Stream will bypass it, thus depriving Kiev of the much needed currency and of any chance of blackmailing Russia by delaying gas payments. The Nabucco pipeline -- if it is ever built, of course -- will also bypass Ukraine, but so far it looks like their leaders do not seem to mind. Moreover, they are cheerleading it, so is there some secret protocol to Nabucco regarding Ukraine?

To sum up, the way things are now, the Nabucco project may end up as a hot air balloon, for its economics are pretty questionable while the politics surrounding it smells very bad indeed.

However, one good thing for Russia is that Nabucco should force it to be more aggressive in building the alternative Nord Stream and South Stream pipelines and at the same time spare no effort on its economy diversification so as not to depend too much on its natural resources.
As for Nabucco cheer leaders it is to early for them to celebrate. At the present time I’d not advise to buy the pipeline stocks to anyone but instead want to repeat to some narrow-minded folks that it is a lot more advantageous to have Russia as a friend rather than foe.
(Russia Blog)