EU-Ukraine pipelines modernization deal obstacles for a Russia-EU partnership and cooperation agreements

European Union interests are at stake now, as its energy dependency of Russian gas has become a hard pressed issue due to gas conflicts striking Europe two years in a row now.  Europe has to think of its energy security and as a measure for this proposed to assist in modernizing the Ukrainian pipeline providing 80% of Russia’s gas to Europe.
Russia stated immediately that Russia was to be part in this dialogue as it was their gas being transported and felt left outside by EU.

Russia is flexing its muscles again towards the European Union during its partnership negotiation with EU and uses the gas transport route through Ukraine as one of their cards in negotiations. Russia’s Foreign Minister Sergei Lavros stated on April 11th 2009, that the agreement between the European Union and Ukraine on the modernization of the Ukrainian gas transportation system contradicts previous agreements between Moscow and Brussels.

He made no reference to what agreement it was referred, and makes it difficult for the opinion to make any concrete out of this statement.

He also stated that the EU-Ukraine agreement runs counter to all the decisions on how to run business with each other and stated that this is not the only problem in relations between Moscow and Brussels, as Russia has problems as regards the way their partnership with the European Union is developing.

The way Russia now judges their relationship with EU is become harder than before, and Russia blames EU for not wanting to have a close relationship with EU through these statements.

The Russian foreign minister said he hoped that the prospects for concluding a new partnership and cooperation agreement between Russia and the EU would include practical provisions regarding the protection of each other's interests.

It will be very interesting to see what topics Russia means are their interests and what issues EU judge to be theirs. For some reasons there is a chance that there will be common issues which there are conflicts of interests.

EU on its side will ask for security of gas deliveries to Europe, not only for Russian gas, but secure a diversity of delivery. EU has to take into considerations several alternative transport routes proposed from the East to Europe. At the same time EU would need to look into alternative sources for its energy needs supply. That means it would need to look into the issue of how to cover the energy need of today and its increase in the next decades. That means EU would have to look into ways to get energy from south east Asia directly as well, without need of expansion of Russian gas transport systems.

Russia on its side will need to address how they could supply more gas to Europe and make sure they can keep the trump card in their hand of supplying 20% of Europe’s gas needs alone. Their interest would not be to diversify transport systems that will not gain supply of Russian gas.

A compromise will have to be struck in any agreements between EU and Russia which will enable them to work out practical mechanisms for defending both parties’ interests.

It remains to see how big a conflict of interest will be in these talks, and whether a document defending both interests are possible to achieve which ensure EU’s energy security needs as well as Russia’s need of capital from its domestic gas resources and their enlarged gas ventures in South east Asia and Iran.

EU would also have to think of their business ventures in the Caspian Sea region, and how to secure a holding in resources these ventures have found.

There will be difficult negotiations as issues directly affecting the parties' fundamental interests are being addressed, and there are conflicts of interests here to deal with.