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. Last Updated: 07/27/2016

Gazprom Eyes Northern Export Route

Gas monopoly Gazprom wants Poland and Slovakia to build pipelines letting the monopoly export more gas across them and may build a line bypassing them if they do not, a top company official said.

Gazprom executive council member Yury Komarov said the company needed to diversify export routes, and would build a new Northern Pipeline under the Baltic Sea to Germany if it could not send more across Central Europe.

"Even though logic dictates we diversify our export routes by building regional connections, uncertainty over the position of Poland and Slovakia may lead Gazprom to decide the Northern Pipeline will go ahead first," he said in an interview.

He said if the Northern Pipeline was built, it would mean long delays to planned construction of a second line across Central Europe on the Yamal-Europe route, a recently opened gas line intended eventually to link Europe with the remote Yamal peninsula on Russia's Arctic coast.

"This would inevitably diminish the status of Poland, Slovakia and the Czech Republic as transit countries. If we build the Northern Pipeline, it will have a capacity of at least 30 billion cubic meters a year, so the volume of gas in transit across Eastern Europe would fall correspondingly."

Yamal-Europe's capacity is 30 billion cubic meters a year.

Komarov said Gazprom could decide within two months whether or not to build the Baltic route as a first priority.

"We need this two-month period to find out how serious Poland and Slovakia are about building pipeline connections of around 600 kilometers running across Belarus, Poland and Slovakia," he said.

"These would link the Yamal-Europe pipeline with other lines running to Eastern and Western Europe from Ukraine."

The connecting infrastructure in Central Europe has been valued at between $700 million and $1 billion, compared with an estimated $3 billion for the underwater pipeline.

Komarov said Gazprom had effectively been forced to diversify export routes and wanted to do so as soon as possible.

"The actions of Ukraine leave us with no alternative," he said, in a reference to repeated claims by Gazprom that Ukraine regularly steals Russian gas transiting the country and fails to spend enough on maintaining pipelines on its territory.

Since the Belarus-Poland stretch of the Yamal-Europe line opened last September, Gazprom has been able to reduce some of the 110 billion cubic meters, or 90 percent of all gas exports outside the former Soviet Union, sent across Ukraine.