EU member states in the South-eastern region are dependent on natural gas from Russia, however, have diverging views on the Nord Stream 2 Project. Greece and Bulgaria are in favor of the project, as Bulgaria hopes to be the centre of natural gas importation and exportation. On the other hand, Slovenia, Romania, and Hungary are against this initiative, such as the concern on how it may change the EU energy system, divide the EU, or lead to financial loss. Some countries such as Hungary and Bulgaria question the decision making factors of the European Commission in approving or disapproving pipeline projects on the basis of past canceled projects.
This blog article focuses on the South-eastern European Region; first describing the overall effect of the Nord Stream 2 Project (NS2) followed by an analysis of each state. Disclaimer: some states had more articles than others, hence the difference in depth. I need to do more research in the ones that are lacking. Additionally, Hungary is included in Central-eastern Europe but I did some research on it as we divided it initially.
South-eastern Europe (Slovenia, Croatia, Romania, Bulgaria, Greece)
Research by ewi Energy Research & Scenarios GmbH shows that the welfare effect of NS2 in Central Eastern Europe (Hungary, Slovakia, Poland, and Czech Republic) is between 1.0 and 3.9 billion euros per year whereas for South Eastern Europe it is between 0.5 and 1.7 billion per year. These numbers are based on scenarios with the global LNG demand.
In March 2016, prime ministers of Hungary, Romania and Croatia signed a letter opposing the Nord Stream 2 project to the European Commission with the prime ministers of Czech Republic, Estonia, Latvia, Poland, Slovakia, and the president of Lithuania.
The map on this site shows most countries of South-eastern Europe are heavily dependent on Russian gas.
Slovenia is 75-100% dependent on Russia for natural gas.
In Feburary 2016, Lithuanian President Dalia Grybauskaitė and Slovenian President Borut Pahor agreed that NS2 “would violate the principles of the EU energy union, distort competition and the European gas market and would allow Gazprom to destroy EU members states’ unity.”
Croatia is 0-25% dependent on Russia for natural gas.
With Romania taking over EU presidency, it has set restructuring the Gas Directive in the European Union Council as its priority. According to the Warsaw Institute, the presidency was passed on by Austria, which had a conflict of interest as the Austrian company is a financial partner of NS2. The revision includes a new regulation that “all new negotiations with third countries, as well as changes in existing agreements, have to be agreed on by the European Commission.” This would mean that the NS2 must be permitted by the Commission and it can be rejected when it is in conflict with “EU law, would harm the operation of the internal gas market, competition or security of supply, or undermine the objectives of ongoing intergovernmental negotiations with the European Union and a third state.” With the European Parliament elections in May, the new regulations must be passed before then as the next reform would have to occur at the end of 2019 when NS2 is near to being finished. Romania has had close relations with Poland especially in the last year and energy has been a common interest.
The revision also includes a clause in which the Commission must decide within 90 days on a Member State’s proposal. If it is permitted, the Commission must advise on aligning the procedure with EU laws, while being continuously informed. There was also a revision in the meaning of an “interconnector,” which would now include offshore connections in addition to linkages on land.
Hungary: oppose but critical towards European Commission
Hungary is 50-75% dependent on Russia for natural gas.
Hungary has also been in talks with the U.S., which stresses Russia’s influence on the region with NS2, and instead promoting Hungary and its surrounding states to import gas from the U.S. or other states. Hungary has requested the U.S. to support them in expanding their energy resources. In July 2017, Hungary signed an agreement with Gazprom to connect with the Turkish Stream pipeline by the end of 2019. This project would yield a greater quantity of gas (5 to 6 billion cubic meters) to the south of Hungary. Currently, Hungary imports Russian gas through Ukraine. The state is open to importing gas from Croatia and Romania, however the pipeline through Romania is proving difficult for technical reasons. Additionally, a nuclear power plant is being constructed by Russia in Hungary.
Hungary has made efforts in diversifying its gas imports as reported in February 2018. It is set to sign a deal with Romania of buying 50 percent of needed gas (more than 4 billion cubic meters) from Romania for 15 years. This will reduce its reliance on Russia. It is set to begin after 2022. In 2015 Hungary consumed 7.5 billion cubic meters, imported 6.8 billion cubic meters and domestically produced 1.8 billion cubic meters. Consumption has decreased regardless of price reductions especially in households. Currently, most of its imports are from Russia through a long-term deal. The Hungarian government stated that Romania would make it feasible for Hungary to import gas supplied from the Black Sea by 2020.
In August 2018, Hungary’s state secretary Peter Kaderjak proclaimed that NS2 would bring more disadvantages for Eastern Europe, adding on that a pipeline through Romania, Hungary, Slovakia and Austria would be a more valuable course of action. Hungary had been in favor of the project before this, however, has changed its stance as gas from Ukraine would be cheaper and NS2 would bring additional costs. It also states that NS2 would bring Russia more control of the energy market in Europe.
In October 2018, Foreign Minister Peter Szijjarto stated that Hungary seeks to make their own decisions on energy supplies such as importing Russian gas from Turkey. He has spoken out about the differing decisions by the EU for pipeline projects and its proximity with Russia, which affect central and eastern Europe. Hungary has been in support of TurkStream, which was disapproved by the EU. He states that the NS2 Project is a Western European pipeline and there is a contrasting difference with the southern pipeline.
Bulgaria: support and critical towards European Commission
Bulgaria is 75-100% dependent on Russia for natural gas.
In October 2014, publications by the European Commission showed that Bulgaria would lose the most financially with the NS2. The Commission has funded the creation of a pipeline from Bulgaria to Austria through Romania and Hungary.
In 2015, Bulgarian Prime Minister Boiko Borisov expressed its support for NS2, even though the week before it was listed as one of the countries that had reservations towards the project. Bulgaria seeks to be a gas hub which would be advantageous for its country, where Russian gas can be connected to Bulgaria from the Black Sea.
In May 2018, it was reported that Bulgaria sees Russia as an import ally for energy resources in oil and nuclear fuel in addition to gas. 100% of its natural gas is sourced from Russia. It hopes to have a “Bulgarian Stream” which is similar to NS2. It is a renewed attempt after the former Bulgarian government canceled a pipeline project with Russia on the reasons of European Commission’s views and the content of which excluded other European states except for Bulgaria, Russia, and Greece to build this pipeline in Bulgaria. This would have been a violation of EU law. This project turned into the Turkish Stream and it is yet unclear of where the pipeline from Turkey would lead to. Russia will not proceed in building a pipeline with Bulgaria unless there is assurance that the project will not be canceled again. The Bulgarian Prime Minister has also expressed that the EU is depending heavily on gas through Turkey.
In December 2018, it was reported that Bulgaria’s state-owned network operator Bulgartransgaz was calling for investments for the TurkStream pipeline connecting Russia to central Europe through Serbia, Bulgaria, Hungary, and Austria. The 484km TurkStream pipeline from Turkey to Serbia is planned to be constructed by 2020 and Russia has voiced that it would bid for the majority of the project.
In February 2019, Bulgaria is in support of NS2 with Hungary to import Russian gas either from NS2 or TurkStream.
Like Hungary, Bulgaria questions the decisions in the European Union as it sought a South Stream gas pipeline but was unable to obtain it. With Italy and Ukraine, Bulgaria believes that the NS2 will bring greater profits for Germany.
The first pipeline of NS2 is expected to go through Turkey and then either to Bulgaria directly or through Greece. The second may mimic the first or branch out directly to Bulgaria without passing through Turkey.
Greece is 50-79% dependent on Russia for natural gas.
In December 2015 it was reported that the Energy Minister did not sign the letter to oppose NS2.
There have been new constructions of LNG terminals in Croatia and Greece encouraged by the U.S. to diversify the supply of gas from other states.
Greece is also in talks for the TurkStream passing by its state to Italy.
Overall, we can see that many states in South-eastern Europe are reliant on Russian gas. Opinions on the NS2 are divided: Slovenia, Romania and Hungary oppose on reasons such as dependency on Russia, while Bulgaria and Greece support this as it would bring greater economic benefit for their states. Criticism towards the European Commission has been expressed by Hungary and Bulgaria as the approval of pipeline projects have been inconsistent on the basis of which countries are involved. They are in favor of TurkStream, in which the pipeline is set in Southern Europe. More research is needed on Croatia.