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EU unveils plan to weaken Russian grip on gas supply
• Southern corridor pipeline would bypass Gazprom
• Strategy is part of £1.5tn energy security package

* Ian Traynor in Brussels
* guardian.co.uk, Friday November 14 2008 00.01 GMT
* The Guardian, Friday November 14 2008
* Article history

Europe yesterday stepped up attempts to reduce its exposure to potential Russian blackmail over energy supplies, unveiling an ambitious strategy aimed at weakening Russian giant Gazprom's domination of Europe's gas imports.

On the eve of the Russia-EU summit today in France, the energy package released by the European commission highlighted Europe's dependence on Russian exports and sought to devise strategies to wean Europe off the addiction.

Of six energy projects pinpointed for development, commission officials said the two "absolute" priorities were to connect the three post-Soviet Baltic states of Lithuania, Latvia, and Estonia to European power grids and to forge ahead with the so-called "southern gas corridor", which is supposed to transport gas from the Caspian basin to Europe while, for political reasons, bypassing the world's two biggest gas producers, Russia and Iran. Both projects are aimed at loosening Russia's grip.

By next year Brussels also aims to have set up a consortium of European companies to buy gas from the Caspian basin, to be shipped to Europe in a new pipeline from Azerbaijan, via Turkey and the Balkans, to Austria from 2013. Gazprom currently controls all the pipelines sending gas to Europe from the east.

"The EU wants different sources of supply," said José Manuel Barroso, the commission president, who will negotiate on energy today with the Russian president, Dmitry Medvedev, at a summit in the south of France. "We must not sleepwalk into Europe's energy dependence crisis."

The Baltic states are isolated from the rest of the EU in their energy supplies and dependent on Russia, while another five EU countries in central Europe and Ireland also get all their gas from Russia. Germany is the EU's biggest Gazprom client.

Europe currently gets 42% of its gas, a third of its oil and a quarter of its hard coal from Russia. The commission estimates that by 2030 Europe will be importing 84% of its gas needs, up from 61% at present.

In a direct reference to the perceived threat from Russia, a commission document warned: "Recent events in Georgia have shown that this is a critical time for energy security."

The immediate focus on Russia was contained in a more grandiose long-term package calling for the integration of European power grids and energy markets; the incorporation of North Sea wind farms and Mediterranean solar energy hubs in a nascent European "supergrid"; the development of vast pan-European infrastructure projects; and an energy efficiency revolution. The entire scheme- aimed at making Europe's energy consumption "secure, sustainable, and competitive" - would cost almost €2 trillion (£1.5tn) by 2030 and is also factored into the campaign on global warming, ostensibly making Europe the world leader in the low-carbon economy contest.

The commission proposals said current contingency planning on gas supplies "might not provide an effective and timely response in crisis situations" and called for common policy-making among the 27 member states to define "an effective EU emergency plan", to cope with possible disruptions of supplies.

The EU has been struggling for two years to come up with coherent policies towards Russia, particularly on energy, while Russia and Gazprom have strengthened their grip by creating facts on the ground and cutting deals with individual countries.

Relations between Moscow and the west, already poor, plumbed new depths in August when Russia invaded Georgia. Despite the tensions, EU governments decided on Monday to resume negotiations with Moscow that were called off in protest at the Caucasus conflict. Britain performed a volte-face, going from being a fierce critic of Moscow to supporting the resumption of talks on a strategic pact between Russia and Europe.

"The British signalled well in advance that they were giving up [opposition to the negotiations]," said a senior European minister.

The dependence on Russian energy played a crucial role, he added. With gas prices currently low, Gazprom has in recent weeks been offering long-term supply contracts to individual EU countries such as Germany and the Netherlands, sowing divisions within the EU. The east European and British critics of Russia abandoned their opposition in the hope that a concerted policy would strengthen the EU in its dealings with Moscow.

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