Title: Europe's Strategic Dependence on Russian Energy | The Heritage Foundation
Headings: Europe's Strategic Dependence on Russian Energy
Europe's Strategic Dependence on Russian Energy
Ariel Cohen
Director, CENRG and Senior Fellow, IAGS
Energy Dependence on Russia
Implications for European Energy Security
Policy Implications for the United States
Authors
Ariel Cohen
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Content: Russia's second tactic is to lock in supply by consolidating its control of strategic energy infrastructure, most notably pipelines, throughout Europe and Eurasia. Russia is using outright ownership and joint ventures to control supply, sale, and distribution of natural gas and is buying up major energy infrastructure, such as pipelines, refineries, electric grids, and ports. In 2002, Russian state-owned Transneft attempted to gain control of the Mazeikiu Nafta refinery in Lithuania and the Ventspils oil-export terminal in Latvia. When the two governments refused to sell their stakes to Transneft, Moscow sharply cut oil deliveries, forcing Ventspils to obtain oil by rail. [ 16] Russian pursuit of the Lithuanian refinery was cut short when the Polish company PKN Orlen bought the refinery in 2006, [17] but Moscow is still pursuing the Latvian terminal. As recently as May 2007, a top Ventspils executive said that "the company was prepared to take on a strategic Russian investor." [ 18]
As of 2004, Gazprom had invested $2.6 billion in 23 major joint ventures, including buying a 50 percent stake in Slovrusgaz in Slovakia, 48 percent of Europol Gaz inPoland, and 30.6 percent of Eesti Gaas in Estonia. [ 19] Russia is also buying up strategic infrastructure companies in Georgia, Hungary, and Ukraine. [ 20] In 1998, Gazprom took over shares of Topenergy, a Bulgarian company dealing with commercial distribution of gas. [ 21]
Russia is also aggressively consolidating its control of European pipelines.