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International Herald Tribune: Germany gets leading role as Russia strategic partner

By Judy Dempsey International Herald Tribune

Published: October 12, 2006
BERLIN As both sides of the Atlantic compete for reliable energy sources, Russia appears to be playing Europe against the United States by favoring Germany as its most important strategic partner and the main transit country for Russian gas to lucrative markets in Western Europe.
The goal of linking Europe’s largest economy much more closely to Russia emerged clearly this week: Moscow shut out American firms from the development of a major gas field and reneged on previous plans to send liquefied natural gas from that field to the United States, and President Vladimir Putin spelled out priorities to Russian and German political and business leaders in Dresden.
Returning to the city where he was a KGB agent from 1985 to 1990, Putin dwelled on the new North European Gas Pipeline Russia and Germany are building under the Baltic Sea. Once in place, he noted, Germany will gain a special role in Europe’s energy market. “This would mean that Germany is not only a consumer of natural gas but would make it a big European distributor of Russian gas,” Putin said. “It would transform the energy face of Germany and strengthen its role in European energy matters.”
Gazprom, Russia’s state-owned gas monopoly, already supplies a third of Germany’s energy and a quarter of all gas consumed in the European Union.
While West Germany started developing trade and energy contacts with the Soviet Union in the 1970s, the current big push by Germany and Russia to forge closer economic ties goes well beyond traditional realms. At €25 billion, bilateral trade for the first six months of this year almost equaled that for all of 2005.
“Putin and Gazprom have a lot of cards in their hands,” said Jonathan Stern, director of research at the Oxford Institute for Energy Studies.
Two U.S. oil firms, ConocoPhillips and Chevron, were dealt losing cards this week when Gazprom – in line with earlier Russian moves to renege on deals giving Shell oil from fields in Sakhalin – said it would exclude foreign companies from shares in the huge Shtokman gas field and instead develop it alone.
Two European oil firms, Total of France and Norsk Hydro of Norway, had also hoped for a deal on Shtokman. But America suffered the added blow of being denied liquefied natural gas supplies from the field once it is developed.
“Shtokman will be the resource base for Russian gas exports to Europe via the North European pipeline,” declared Alexei Miller, Gazprom’s chairman. Foreign firms will participate only on specific technical contracts, he added. “This decision is an additional guarantee of the Russian gas supply to Europe, security in the long term, and proof that the European market is of dominating significance for Gazprom.”
Stern noted that this decision, announced Monday before Putin met Chancellor Angela Merkel in Dresden, marked a return to Russia’s original plan. “Instead of sending gas to the U.S., it will now send the gas from Shtokman via the new pipeline to Europe,” he said.
“Europe and Russia will become even more dependent, as Europe buys more gas from Russia and Russia depends on Europe as a reliable market.” and its sister non-profit websites,,,,,, and are owned by John Donovan. There is also a Wikipedia feature.

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