The EU is scrambling to end its dependence on Russian gas once and for all by striking deals with alternative suppliers, but its plans to scupper Russian President Vladimir Putin’s grip on energy have the potential to backfire. As part of its REPowerEU strategy, the bloc’s plot to finally cut its energy ties with Moscow, the EU has been working to diversify its gas sources by striking deals with countries such as Algeria, Azerbaijan and Qatar.
And this week, EU negotiators agreed on a measure to cap the price of gas imports in further efforts to slash the Kremlin’s revenue. But Algeria, which last week pledged to double its gas production for exports to 100bcm in 2023 to bolster Europe’s supplies, was not a fan of the measure.
It warned that the gas cap of €180 (£156) per megawatt/hour (MWh) – which can be triggered from mid-February 2023 -risks destabilizing the energy market. Given that the North African nation (which is not strictly a “repressive regime”), is keen to ramp up its energy exports to Europe, Brussels may want to do its best to keep Algiers on its side.
Responding to the cap, Algerian Energy Minister Mohamed Arkab told a press conference: “Algeria does not support the idea of capping prices. The energy market must be free to continue investments and projects.
“The development of investments depends on transparent and non-discriminatory legal frameworks supported by clear energy, financial and environmental policies in gas-consuming and transit countries.
“We, with our partners in Germany and Europe, fully agree on providing the continent with energy, especially with gas.”
But while Algeria appears for the moment to remain committed to supplying the EU with more gas, Jacopo Casadei, gas analyst at Energy Aspects, has warned that its promise to double deliveries was “not feasible” as some countries would “struggle” to absorb the large quantities it is hoping to send to storage plants.
However, Alergia is not the only country the EU is turning to as it races to fill up its gas storage sites amid fears that Russia, which supplied 40 percent of the bloc’s gas before the Ukraine war, will cut off remaining flows.
The bloc has also turned to Qatar, a major producer, to help fill up these reserves. But as tensions soar amid the major corruption scandal that has come to light this week, there are fears the Doha could do just as Putin has and withhold supplies.
It came after MEPs voted to suspend legislative work on a visa liberalisation deal with Doha, banning all Qatari officials or business representatives from the European parliament. This came following the arrest of disgraced Greek MEP and a vice-president of the European Parliament, Eva Kaili.
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She was accused of being in involved in a bribery network with the aim of helping Qatar to secure a positive deal on an upcoming visa liberalisation agreement. Police also seized more than €900,000 (£785,000) in cash from suitcases owned by her and husband Francesco Giorgi, an aide at the EU assembly.
Alexander Kirk, a campaigner at Global Witness, told Express.co.uk this week that the EU’s focus on securing gas from elsewhere is the wrong way to go about addressing its energy crisis and its reliance on Russia, instead calling for a greater green energy shift.
He said: “There is no ‘good’ way to source fossil gas, as Europe has found out painfully this year. For decades, the gas industry has worked hard to lock the EU into fossil gas dependence. We are now seeing the results: Europe is forced to choose between an unprecedented energy crisis or the funding of repressive regimes, such as Russia or Qatar.
“It is crucial that the EU and its allies take decisive action to further invest in and develop its green infrastructure, not only to protect the planet but also to safeguard the well-being and interests of its citizens against autocratic governments that seek to exploit and undermine them through the use of fossil fuel diplomacy.”
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Similar issues were riased this summer when the EU struck an agreement with Azerbaijan that will see a substantial increase in the annual volume of gas exported from the Caspian petrostate to Europe over the next five years. According to a signed document, by 2027, it will send Europe at least 20 billion cubic meters of fossil gas every year via the Southern Gas Corridor (SGC)— a 3,000-kilometre network of pipelines sending gas to the EU.
This is despite the fact Azerbaijan’s President, Ilham Aliyev, met with Putin in the Kremlin and signed a Declaration on Mutual Cooperation between Azerbaijan and Russia just two days before the Russian President sent his troops into Ukraine back in mid-February 2022.
While European Commission President Ursula von der Leyen claims Azerbaijan is a “reliable partner” in terms of energy, there is said to be Russian involvement in key parts of the Azeri gas supply chain en route to Europe which puts those claims into question, Politico reports.
Gligor Radečić wrote in an opinion piece for the publication: “What’s little discussed, however, is that critical infrastructure needed to extract and transport the gas from the Caspian Sea to Europe is co-owned by Lukoil — a Russian oil and gas giant closely linked to Russian President Vladimir Putin’s regime.
He later added: “Not only is Lukoil a major taxpayer in Russia, which is able to use its gas profits from Azerbaijan to fund Putin’s war machine, but its position in so many Azeri projects gives the company access to information that could be used to support Russia’s continued weaponization of its own fossil fuels exports.”