The price competitiveness of Russian gas supply corridors to Europe: the Ukrainian Route vs. the Nord Stream
23 February 2017, 3:30 - 7 PM CET
TUSIAD Avenue des Gaulois 13, Brussels 1040
In many a meeting of the Brussels Energy Club, we have discussed and debated what might be a "fair price for gas". While views on this subject will continue to differ, many of us would agree with the notion of letting the "market decide" is a reasonable compromise direction. However, in the gas business, the idea of bringing buyer and seller together does not always constitute what Adam Smith may have construed to be the "perfect market". To the contrary, in the wider-European gas markets, ministers often tend to take a more prominent role than managers.
The perception of overarching policy objectives casting their shadow over market forces tends to be high. This applies in particular to some of the big, Russia-driven infrastructure projects, such as Gazprom's major gas supply pipelines to Europe. Very few of these projects tend to receive the "red carpet" treatment in Brussels, however. Indeed, many an energy punter in Brussels questions the commercial viability of such projects.
All of that said, there is one fundamental question to be asked about the Nord Stream pipeline projects, particularly the expansion project Nord Stream 2: is this a more cost efficient way of bringing Russian gas to the EU than via the long-establishedcost-efficient Ukrainian corridor? While this is the type of question that might raise some eyebrows, it remains a discussion that needs to be had — ideally in a sober and rational manner.
And it is for this very reason that we invited Konstantin Simonov, author of the recent paper: Nord Steam 2 vs. Ukraine: Let the Costs Decide, to lead the discussion. At this BREC meeting on February 23 we 'debated it out' in order to grasp which route is the real winner when it comes to the price of gas deliveries to Europe: Ukraine's long-established energy corridor or Russia's Nord Streams.
Program February 23, 2017: 15.30 — 19.00:
Setting out the debate by Dr Marat Terterov, Executive Director, Brussels Energy Club,
Presentation by Dr Konstantin Simonov, Executive Director, Russian National Energy Security Foundation, starting at 16.00
Roundtable discussion with meeting participants (NB: the Chatham House Rule will apply).
Networking reception with buffet will follow the main discussions
Director and Founder of the Russian National Energy Security Foundation, Moscow