The Greco-Russian Energy Alliance


There are times, such as the present, when the delicate balance between sympathy and national interest becomes blurred. The energy alliance between Russia and Greece was the topic of the week and it raised many questions.

Nikos Kotzias, Greece’s foreign minister, said Gazprom made a great offer with a guarantee of gas supply for ten years on great prices. He mentioned that if Western powers cannot come up with something better, they don’t have a choice but to accept the alliance.

Russia offered to supply 47bn cubic metres (BCM) of gas to Greece, generate muchneeded revenue for the Greek authorities, create 2,000 jobs, and turn the country into an energy hub. All of this could also bring €5bn in advance payments. In practice, Russia has its own economic troubles and even if it wanted to, it couldn’t provide help for Greece in the short term.

The deal was due to be signed last Tuesday, but Washington caused a delay, out of fear that it would affect the strategic balance in the Eastern Mediterranean. Greece also had issues with the “take or pay” clause, Gazprom would require some sort of a settlement for unused gas, but Greek natural gas Company DEPA complained.

The US Energy Secretary, Ernest Moniz, advised that the US is pushing for an alternative gas pipeline that would come from Azerbaijan. This pipeline would loosen the grip that Russia’s Gazprom has on the European markets. He also emphasised the importance of “collective energy security” in Europe.

The interesting thing is that Europe’s Russian sanctions are set to expire in July, and that’s when Greek loan payments are due. That probably hasn’t been overlooked.

Athens and Moscow already had an idea of a joint oil pipeline that would bring Russian oil from the Bulgarian port Burgas to a terminal in northern Greece. That idea was alive for approximately ten years, but nothing happened due to aggressive competitors and an inability to come to an agreement.

Both Greece and Russia made a strong commitment to the Turkish Stream, but the response of the EU Commission and Energy Community is what will matter the most. They, however, forbid producers from possessing stakes in major transit infrastructure projects. It’s important to remember that the EU holds the last word, after all.

Russia is mostly interested in Greece’s main power – a veto on further EU sanctions against Russia. Even though Russia seems to be prepared to provide financial incentives in exchange for the veto power, it seems that Athens still cannot give Moscow what it wants. If Russia launches an offensive in the area and captures Mariupol, based on its position, it is unlikely that Athens will provide support.

Alfa Energy Group

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