Nord Stream 2: May Cooler Heads Prevail
Since the announcement of the Nord Stream 2 project in June 2015, the debate around the benefits of this project for Europe is raging, putting forward political, economic and commercial arguments.
Within the space of a few months, Russia has conducted a radical strategic change towards Europe in its gas policy. Following the announcements in 2014 of a major shift towards Asia, the cancellation of the South Stream project and its replacement by the Turkish Stream, relations with European gas companies have been strengthened since mid-2015.
Russia's initiatives to replace its European partners are now to be viewed as part of a transformed international gas landscape. Tensions in the liquefied natural gas (LNG) market following Fukushima have given way to market surpluses. These are characterised on the one hand by lower growth in Asian demand for LNG gas, and on the other hand by the arrival on the market of new major exporters such as Australia and the United States. A new era, more favourable to gas importing countries, has opened up since the end of 2014. Moreover, the key pivot to Asia, expected by Moscow in 2014, is still far off. Discussions with Beijing about the project for a Western route proved to be more difficult than expected. Similarly, negotiations between Turkey and Russia on the Turkish Stream project have been very laborious, having been interrupted for several months because of diplomatic rows between the two countries. Finally, Russia's room for manoeuvre has narrowed, given the collapse in oil and gas prices and Western economic sanctions, which are weighing heavily on its economy. And the increased competitiveness of Russian oil companies due to the ruble devaluation will not transform this situation sustainably.
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Nord Stream 2: May Cooler Heads Prevail
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