Abstract
In the 1990s the chaotic market transition in Russia and underinvestment in new gas projects prevented Gazprom from benefiting from the growth of gas demand in western Europe. Competitors of Gazprom captured new European market niches, while Gazprom lost significant market share. In response, in the 2000s Gazprom developed an “energy empire” strategy whose core idea was to regain its former position and improve it through investment in downstream assets in Europe. This proved to be futile, so Gazprom came up with a new strategy: to compensate for the earlier missed opportunities and mistakes by making huge investments in large-scale transportation and production projects. Crucial to this strategy are the new export routes, the Nord Stream and South Stream pipelines, which are being constructed by Gazprom. Bypassing the transit states of Ukraine and Belarus, these pipelines eliminate transit costs and transit risk. They are also a strategic response to the new challenges of the European gas market. Gazprom’s main challenge is not only to prevent further decline of its European market share but to achieve a 33% target for this share, a dream cherished by Gazprom’s top managers since the early 2000s.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
References
Aslund, Anders. 2013. “Gazprom’s Demise Could Topple Putin.” Bloomberg View (blog), June 10.
Bachman Jessica. 2011. “Russia to Divert 20 BCM of Gas from Ukraine to Nord Stream.” Reuters, May 25.
Belikov, Dmitry, and Olga Mordyushenko. 2011. “Gazprom ne pustili v Avstriyskiy hub” [Gazprom was not allowed into the Austrian hub]. Kommersant, June 26.
Dohmen, Frank, and Alexander Jung. 2012. “Europe’s Failed Natural Gas Strategy: Gazprom Hopes to Build Second Baltic Sea Pipeline.” Spiegel Online International (online magazine), May 18.
Englund, Will, and Kathy Lally. 2012. “Bulky Gazprom Loses Weight and Influence.” Washington Post, September 24.
Hafner, Manfred. 2012. “Russian Strategy on Infrastructure and Gas Flows to Europe.” Polinares Working Paper No. 73. Brussels: European Commission, December.
Kacewicz, Michal. 2011. “Nord Stream. Zagrozenie czy Szansa?” [Nord Stream: Threat or opportunity?], Newsweek Polska, November 14 (http://swiat.newsweek.pl/nord-stream-zagrozenie-czy-szansa,84196,3,1.html).
Kuhn, Maximilian, and Frank Umbach. 2011. “The Geoeconomic and Geopolitical Implications of Unconventional Gas in Europe.” Journal of Energy Security (online journal), August 8.
Lavrov, Sergey. 2013. “State of the Union. Russia-EU: Prospects for Partnership in the Changing World.” JCMS: Journal of the Common Market Studies 51 (Special Issue: The JCMS Annual Review of the European Union in 2012) (November): 6–12.
Mazneva, Yelena. 2011a. “Trillion v Trubu” [A trillion into the pipeline]. Vedomosti, December 19.
Mazneva, Yelena. 2011b. “Rekord Investitsiy. Gazprom Sobiraetsya Vlozhit 4 Trilliona Rubley v Novye Stroiki” [A record investment: Gazprom is going to invest 4 trillion rubles in new construction]. Vedomosti, December 19.
Medvedev, Alexander. 2012. “The Natural Gas Paradox.” Blue Fuel 5 (Gazprom Export Global Newsletter), no. 2 (June).
Mitrova, Tatyana, Jonathan Stern, and Mariya Belova. 2012. Evropeyskiy Gazovyi Rynok: Mechty Ne Vsegda Sbyvayutsya. [The European gas market: Dreams are not always fulfilled]. Moscow: Skolkovo Energy Centre, July.
National Petroleum Council. 2003. “Balancing Natural Gas Policy—Fueling for Demands of a Growing Economy.” Volume 2, “Integrated Reports.” Washington, DC: September.
Powell, William. 2011. “Europe’s Natural Gas Supply: Russia Reinforces the Market.” The Barrel, May 26.
Safonova, Yekaterina. 2012. “K 2015 Godu Gazprom Zapustit Srazu Dve Vetki Yuzhnovo Potoka” [Gazprom will launch two lines of South Stream by 2015]. RBC Daily (online newspaper), June 5 (http://rbcdaily.ru/industry/562949984038034).
Shumsky, Tatyana, and Ryan Dezember. 2012. “Gazprom Sits Out Shale Race.” Wall Street Journal, February 17.
Smeenk, Tom. 2010. “Russian Gas for Europe: Creating Access and Choice.” Ph.D. dissertation, Riksuniverstiteit Groningen, International Energy Programme (http://irs.ub.rug.nl/ppn/327665017).
Steiner, Eduard. 2011. “Es wird nie wieder billiges Gas geben” [There will never again be cheap gas]. Die Welt, November 16.
Topalov, Alexey. 2011. “Turziya Vyidavlivaet Skidiki iz Yuzhnovo Potoka” [Turkey forces price reductions from South Stream]. Gazeta.ru, March 17.
Wood Mackenzie. 2001. “Running Short of Gas: The Outlook for UK and Irish Gas Markets.” Horizons Energy, Issue No. 1, November 2001.
Editor information
Editors and Affiliations
Copyright information
© 2015 Andrey Vavilov, Galina Kovalishina, and Georgy Trofimov
About this chapter
Cite this chapter
Vavilov, A., Kovalishina, G., Trofimov, G. (2015). The New Export Routes and Gazprom’s Strategic Opportunities in Europe. In: Vavilov, A. (eds) Gazprom. Palgrave Macmillan, London. https://doi.org/10.1057/9781137461100_7
Download citation
DOI: https://doi.org/10.1057/9781137461100_7
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-68999-6
Online ISBN: 978-1-137-46110-0
eBook Packages: Palgrave Economics & Finance CollectionEconomics and Finance (R0)