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    Slovakia Remains Caught between Russia and Brussels as EU Presidency Looms

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Summary

Slovakia to make preservation Ukraine's gas transport corridor a cornerstone issue of its EU presidency, which kicks off in July. However, the country clearly remains pulled in opposite directions by Moscow and Brussels.

by: bne intellinews | Brian Kenety & Tim Gosling

Posted in:

Top Stories, Global Gas Perspectives, News By Country, Russia, Slovakia

Slovakia Remains Caught between Russia and Brussels as EU Presidency Looms

Slovakia has stressed that it will make the preservation of the Ukraine gas transport corridor a cornerstone issue of its EU presidency, which kicks off in July. However, the country clearly remains pulled in opposite directions by Moscow and Brussels.

Alongside the Nord Stream pipeline, Slovakia is one of two main entry points for Russian gas exports supplies to the EU, picking up the fuel at its border with Ukraine. The country earns huge revenue from its role operating the mainline. 

However, the Kremlin has vowed to build alternative routes to bypass Ukraine by 2020. Slovak Prime Minister Robert Fico has branded a deal agreed by several large European companies with Russian gas monopoly Gazprom and to build Nord Stream II a “betrayal” that will cost his country and Ukraine billions of euros in transit fees in years to come.

Gas transit through Slovakia rose around 10bn cubic metres to total 56bn cm last year, the Slovak Gas and Oil Association said on April 27. However, with gas markets slack, the rise only brings the volume back to previous levels. In the meantime, the country has also added to transit activity by carrying gas from the west to Ukraine. Like the gas flows in its pipelines, Slovakia is being pulled in different directions by the EU and Russia.

Deputy Prime Minister for Investments Peter Pellegrini told the Central European Gas Congress (CEGC) on April 26 that the Slovak transport system, operated by Eustream, is key for security of supply for the European network. “Therefore, we’ll insist on maintaining the gas transportation corridor via Ukraine and promote the maximum use of transport networks passing through Slovakia,” he said, according to TASR

The Slovak state owns 51% of Eustream, the most important asset in closely-held Czech/Slovak EPH’s recently spun off unit EP Infrastructure (EPIF). The risk may have helped persuade EPH to scrap the float on April 27, just 15 days after the plan was announced. The vast majority of Eustream's €630mn revenue in 2014 was earned for the transmission of Russian gas imports to the EU.