‘Europe needs diversified gas supply, Russia diversified consumers’

Russia got tired of banging on a closed door and said that if the EU doesn’t want its gas through South Stream, then so be it, and it will look for different markets, Petr Panov chairman of the investment group Trioctoni told RT.

RT:What do you make of the president saying Bulgaria didn't act alone, and should sue for lost income?

Petr Panov: This is one of the deals which are typical of the oil and gas industry globally. It has economics, politics, and psychology into it. The big picture is that Europe needs a diversified supply of gas; Russia needs diversified consumers of gas. I think at this point in time Mr. Putin said that Russia is tired of banging on a closed door and if the EU doesn’t want Russian gas through South Stream “so be it” and Russia will find different markets… In terms of Bulgaria: the country will lose a revenue stream from these gas projects and the transit of gas. Somehow the EU has to compensate it.

RT:Do you think Bulgaria’s arm was twisted? If so, by who?

PP: I don’t think it is about arm twisting; it’s about Russia building an agreement with the Chinese, building a different pipeline, the “western route” into China supplying 30,000 billion cubic meters, and also finding another ally in Turkey and building another pipeline through Turkey into Greece. So Russia pretty much is avoiding conflict and managing its own gas markets.

RT:Do you think Europe was expecting this?

PP: I think the political situation didn’t help. Yes, I think the situation was building up through the crisis and through the longer-term negotiations, and fuel strategy, energy strategy of Europe. So one could have expected this. In better political circumstances maybe the project would be taking place and will be capitalized and worked on.

RT:What this is going to mean for Russia? Where this gas is going to go? Who are the customers going to be?

PP: There are two points. The Russian GDP is in decline because of the global energy prices - that is inevitable. A different matter is what the priority markets are. By 2020 if all the projects are commissioned and get done, Russia will supply about 17 percent of the gas consumption of China. China is a huge economy which can consume all the gas Russia can produce. Now Russia has to limit its production by about 100 billion cubic meters per year. And gas is a difficult thing to put a plug on, so you have to supply it somewhere. So Russia will definitely go the eastern route and demonstrate that it can diversify and it is not dependent on the EU market only.

The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of RT.