Question: The Commission has asked the Bulgarian government to stop the construction of the South Stream pipeline. It has also opened an infringement procedure against Bulgaria regarding the way the tendering has taking place. How would you comment?
Vladimir Chizhov: I haven’t seen the statement by the Commission so far, if it was a written statement. But in case such a move has been undertaken by the Commission, it appears to be in line with an overall highly politicised line of the EU towards the South Stream project as such.
It appears that against the background of a lot of talk on the need to diversify energy supplies to the EU member states, the EU is anxious to retain the almost monopolistic position of Ukraine as a transit country.
Reply: But the Commission says rightly that the gas from South Stream is also Russian gas and this planned pipeline doesn’t contribute to diversification of supplies, that’s why it doesn’t treat it as a priority project…
Vladimir Chizhov: To begin with, Russian gas is good. It smells nice [smiles] and of course is the cheapest gas available on the European market. I know some countries have been complaining about Gazprom pricing, but these are commercial deals between the various companies involved.
What I would like to stress in this context is that approximately two-thirds, in some countries three quarters of the price the final consumer pays are taxes. It’s a sector of the economy in which all EU member states want to have a cut for their budget, so the taxes are quite high. So from the end price any consumer is paying, here in Belgium or elsewhere, more than half is going to the state coffers, not to the supplier.
There have been many discussions lately of the possible alternative sources in the form of LNG, or even shale gas coming from other parts of the world including the USA. Some politicians here in the EU became very agitated over the issue. But in reality I don’t believe this is a viable option to replace Russian gas in the short and medium term.
For the time being, there is no viable alternative to hydrocarbons, with all due respect to all the wind propellers and other exotic gadgets. Secondly, in Europe for the time being there is no economically viable alternative to Russian gas. And my country has always been a reliable supplier of gas and oil to the European market, for over 40 years now.
So whatever artificial obstacles are created now and then they can hinder cooperation of course, but it doesn’t serve the interests of the consumers.
Question: But how about the use of gas as a political tool? Ukraine pays $485 for thousand cubic meters, much more than any EU country…
Vladimir Chizhov: The funny thing is that Ukraine is not paying $485. Until a week ago it was not paying anything, for half a year already. Now they’ve paid and that money reached Gazprom accounts only yesterday. They paid for February and March. January had been paid earlier by the previous government. But November and December of last year remain unpaid, and also April, May, and now we’re already in June.
This was the topic of the high-level discussion held yesterday (2 June) in Brussels. You know, there are countries that are paying much more than the sum you mentioned. Here in Europe some countries are paying well over $500. To say nothing of Asia.