«South Stream is dead. For Europe there will be no other gas transit options to risky Ukraine, other than the new Turkish Stream pipeline».With these lapidary statement Alexei Miller, CEO of Gazprom, summed up the end of a project that, both for Italy and for Russia could assume a crucial geopolitical value and could be the seal of a strategic alliance between Eni and Gazprom.
However, what variables occurred to disturb the frame of the 2007 agreement? The first is the crisis in Ukraine.The secession of Crimea and the civil war in the regions of Donetsk, Luhansk and Kharkivraised again the ghost of the Soviet power policy all over Eastern Europe and created difficulties for governments – like the Italian one –that entertained very good relationships with Moscow. Italy, as a result, had to align to the policy of sanctions against Russia, losing the flexibility in its relations with it. The second variable is the OPEC policy.
The organization, despite the collapse of oil prices, decided to keep the mining quotas at a high level, probably to drive American crude out of business.Its first result, however, was the damage of many producing countries, like Russia whose hydrocarbons exports account for 75% and represent about half of the state budget. The third variable is the result of the first two, namely the economic crisis.The interruption of the flow of western capital and goods and the global oil depression led to a strong devaluation of the ruble and to a reduction of the funds available in the coffers of the Federation.
The concrete consequence of this situation was the cutting of those projects, the most important of which was the South Stream that cannot be financed with market capitals but that have a geopolitical vision behind them.The weak demand of European markets, due to both the economic contraction and the subsidies for renewable energy, together with the absence of a concrete improvement in the volume of gas to be exported (and, therefore, in the relevant revenues), led the Kremlin to consider the project not economically sustainable and, consequently, to cancel it. Its raison d’être after all, was not to be found in the field of economics, but in that of geopolitics.
The South Stream would have meant the diversification of the routes of Russian pipelines to Europe and would have neutralized the blackmail power of Ukraine, whose political weight is partly due to the fact that its territory is crossed by the Soyuz and Bratstvo pipelines, supplying Russian gas to Central and Southern Europe.The final design of this strategy is clearer by linking the South Stream, which would have served Italy, to the North Stream, which, since 2011, has been supplying Germany and, indirectly, France.These two parallel routes would have reached the main consumers of Russian gas and probably decreased prices, bypassing unstable territories and weakening income positions.
If for Russia the decision to cancel the project represented a setback, what did it meanfor Italy?Let us leave on one side the direct economic damage, not yet fully quantifiable – even though the share of the Saipem, which would have carried out the installation of the pipes, has already lost half of its value – and take into consideration the political one. Italy remains the only major market of Russian gas still depending entirely on the transit of the pipelines in Ukraine and, therefore, depending on the stability of that country, on its relations with Moscow and on the relationship between this and a European Union where Russophobes governments are the majority (also because of the reckless foreign policy of the Kremlin).
These are three conditions on which, as demonstrated by the history of the last decade, it is not possible rely on.The elimination of the South Stream, however, having as its first objective the diversification of routes (source or supply ones), would have constituted a simple setbackin a different context situation (like that of early twenty-first century). Conversely, it might today assume the outlines of a real defeat because of the disorder that is engulfing the Mediterranean region.It must be added,indeed, to the civil war in Libya, whose pipelines still manage to ensure a part of the supplies agreed in the past, to the general instability affecting the Arab States and to the obstructionism “with no ifs and buts” of several Nimby movements that prevent the development of our country.
The hope is that there are no further changes blocking also the Trans Adriatic Pipeline from Azerbaijan, which, however, does not seem to be able to solve by itself the problem of our energy dependency.