Gas Pipeline Project Gets Underway With Schröder Under Fire | Business| Economy and finance news from a German perspective | DW | 10.12.2005
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Gas Pipeline Project Gets Underway With Schröder Under Fire

An ambitious venture for a gas pipeline between Germany and Russia will go ahead but news that former German Chancellor Gerhard Schröder is to head the shareholders' committee of the consortium has caused controversy.

The pipeline will take a direct route from Russia to Germany

The pipeline will take a direct route from Russia to Germany

"Mr. Schöder will take the position," said Gazprom Chairman Alexei Miller Friday at the ceremonial launch of the construction of the North European Gas Pipeline, of which the state-owned Russian energy giant owns a 51 percent share. "And today we have launched a great European project... This is a new export route that will increase Europe's energy security."

During his term, Schröder shored up Germany's ties with Russia and pushed for the pipeline. He was often criticized for his close relationship to Vladimir Putin, the Russian president and his overlooking of human rights violations in Russia in pursuit of that relationship.

Some are questioning Schröder's ethics in gaining from a deal he pushed as chancellor. "It stinks," Reinhard Buetikofer, co-chairman of Germany's opposition Green Party told the Associated Press.

Greater opportunities for Germany

It's an important step for relations between the two countries, officials say. German Economy and Technology Minister Michael Glos, who arrived in Russia for talks with President Vladimir Putin on Thursday, was at pains to point out the significance of Berlin's partnership with Moscow.

"This new project plays its role in expanding partnership between Russia and Germany," Glos said.

Wirtschaftsminister Michael Glos

Minister for Economics, Michael Glos

He said Germany has a great interest in being supplied with gas from Russia, adding that other west European countries could stand to benefit from the 1,200 km long pipeline which will run from the Russian port of Wyborg to the north-eastern German town of Greifswald and is scheduled to be in operation by 2010.

Glos also praised the "politically solid foundation of the bilateral economic relations" and said he hoped the project would provide greater opportunities for German companies in the Russian economy.

Symbolic welding

Glos was joined by Russian Prime Minister Mikhail Fradkov for the launch ceremony of the North European Pipeline in the northern town of Cherepovets, which was marked by the symbolic welding together of two pieces of pipeline.

Wladimir Putin besucht Gerhard Schröder

Schröder and Putin endorsed the project

The deal, which is worth 5.7 billion Euros ($6.7 billion) was clinched back in September, shortly before then-Chancellor Gerhard Schröder was forced to admit defeat at the polls. The pipeline, which will be built by Gazprom and the German companies, Ruhrgaz and B.A.S.F, could be extended to a total length of 3000 kilometers, delivering gas to Britain and Scandinavian countries.

Baltic states slam plan

Poland and Ukraine which currently receive transit fees from Gazprom for allowing its pipelines to be transported across their territories reacted with outrage at the planned pipeline. Other ex-soviet Baltic states also criticized Berlin and Moscow for making the decision to proceed with the ambitious project over their heads. But Schröder's government rejected the reproach that it did not consult its new EU partners, saying that the venture is of a commercial nature and aims at diversifying gas supply routes for western Europe.

Poland and Lithuania, both members of the European Union, also worry that the pipeline could endanger the Baltic Sea's fragile ecology and that their gas supplies could be threatened if Russia were able to export directly to western Europe without crossing east European territory.

Lithuanian Prime Minister Algirdas Brazauskas told Bild newspaper earlier: "During the preparation of the project nobody asked our opinion even once. Everything was done behind our backs... I don't know who is trying to play around with us, Russia, or maybe


Angela Merkel mit Lech Kaczynski in Polen

Angela Merkel with Poland's president-elect Lech Kaczynski

During a visit to Warsaw Monday, EU Energy Commissioner Andris Piebalgs attempted to allay concerns that construction of the pipeline could disturb tons of chemical weapons dumped in the Baltic Sea following World War II.

"I have met with all the representatives of Gazprom, Ruhrgaz and BASF. They assured me that construction will not begin in the Baltic Sea until ecological and environmental concerns have been answered," Piebalgs told journalists.

Last week, Germany's new Chancellor Angela Merkel also sought to defuse tensions, promising to create a working group to examine the project that would include Poland.

On her debut visit to Poland as the new German Chancellor, Merkel assured Warsaw that close German-Russo ties did not mean the exclusion of Poland.

"Good, strategic relations with Russia are important to us but they cannot be developed over Poland's head," Merkel told reporters after meeting Polish president-elect Lech Kaczynski. "Good German-Polish relations and German-Russian relations cannot be mutually exclusive."

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