On Friday, Leningrad oblast Governor Valeriy Seryudkov announced that Gazprom has begun to lay a pipeline across his region that will immediately allow the completion of the gasification of rural areas there and ultimately connect to a pipeline to be laid on the Baltic seabed from Vyborg in the Russian Federation to Greifswald in Germany.
To be built jointly by Gazprom and Germany’s BASF corporation, that 1189- kilometre subsea section of the pipeline is scheduled for completion in 2010 and will carry gas from the Russian Federation’s South-Russia fields to Germany and Western Europe. Branches to be built later will carry Russian gas to Finland, Sweden, and Great Britain.
The construction of this pipeline will significantly strengthen the negotiating position of Gazprom and the Russian government which controls the company with those countries, including Estonia, Latvia, Lithuania, Poland, Ukraine, and Belarus, through whose territories Russian gas now passes westward to Europe.
Once the pipeline is built, Moscow will be in a position to play one or more of these countries against the others, thus limiting the ability of these states to co-operate in ways that the Russian government finds objectionable – or in the most extreme case, the Russian government can threaten not to send gas westward across any of them.
And at the same time, the Russian government’s ability to make such choices on at least some occasions may allow Moscow to play up divisions between the more Atlanticist states of the "new Europe" and the European Union’s older members, particularly Germany.
Rising gas prices have made this long-discussed project economically viable, but both Russian officials and German analysts have indicated that Moscow’s primary goal is political because such a pipeline gives the Russian government enormous leverage on the Baltic countries and Poland.
Those four countries, Germany’s Russia expert Alexander Rahr says, are very concerned about what this new pipeline will mean for them, with Poland identifying it as a major foreign policy challenge and the Baltic countries proposing an alternative underground and hence more ecologically secure "Amber" route through their territories.
That Moscow will use its new leverage against the Baltics was already demonstrated earlier this month when Gazprom demanded that the Lithuanian authorities end regulated natural gas prices for major consumers, something that could trigger inflation there and thus by itself prevent Vilnius as well from entering the eurozone as planned.
Indeed, even in advance of this Russian ultimatum, London’s "Financial Times" had reported on July 25 that central bankers across Eastern Europe are convinced that dramatic increases in Gazprom prices could "wreck the expansion of the eurozone in 2007" and thus leave the EU’s newest members out in the cold.
Whether Gazprom will get its way now and indeed whether this much-discussed northern gas pipeline will in fact be completed, of course, remain very much open questions. But even the possibility that they will be represents an important contribution to Moscow’s „power” politics in the region.
And in yet another indication that Moscow views this kind of pressure as most effective, the Russian government has now announced plans to lay a high-voltage cable under the Baltic Sea in order to sell Finland 8.7 billion kilowatt hours of power each year from the Leningrad Nuclear Power Station near Saint Petersburg, the "Moscow Times" said Monday.