Russia and Germany are on the verge of signing a multibillion-dollar pipeline deal that has the potential to alter Europe’s political landscape and seriously aggravate the Kremlin’s relations with its former Soviet neighbours.
The Russian gas monopoly Gazprom is expected to ink the deal on Friday to build a pipeline under the Baltic Sea that will bring vast supplies of gas to Western Europe.
The Russian President, Vladimir Putin, will endorse the deal with German chemicals manufacturer BASF as he visits the German Chancellor, Gerhard Schröder.
The north European gas pipeline will allow Russia to bypass ”unfriendly” states such as Ukraine and Poland.
”It will help us avoid all the complications with those countries and deal directly with the Germans,” said Alexei Makarkin, an analyst at the Centre for Political Technologies in Moscow.
Oil and gas deals have emerged as a key tool in foreign relations as the Kremlin seeks to expand into European energy markets. About a quarter of Europe’s gas is provided by Russia. The pipeline will carry gas 960km under the Baltic sea to the German port of Greifswald and from there to other countries, including Britain. It is expected to come on stream by 2010.
The Polish President, Alexander Kwasniewski, spoke out against the project on Wednesday, saying the deal has been struck ”over our heads”.
He added: ”From the point of view of the European Union … of common EU policy toward Russia, it is not a good situation if one EU member, an important country, Germany, conducts such a policy over our heads and over EU heads.”
Relations between Moscow and Warsaw sank to a new low last month after a series of beatings of diplomats and their families in the two capitals.
Analysts say the pipeline is a sign of the Kremlin’s desire to punish neighbours that it believes are trying to forge a rival power base. Makarkin said it will be a blow to ”countries which are attempting to create an alternative centre of influence on the post-Soviet territory”.
Russia and Ukraine have been at daggers drawn since the ”orange revolution” that swept Viktor Yushchenko to power last year. Yushchenko angered the Kremlin further when he joined forces with the Georgian President, Mikhail Saakashvili, to announce a new pro-democratic alliance.
Moscow and Kiev have clashed repeatedly over transit of gas supplies. Gazprom is threatening to triple the price Kiev pays for its supplies. Ukraine said last week that it could retaliate by quadrupling transit tariffs. — Guardian Unlimited Â