Nord Stream: Not Just a Pipeline

Nord Stream: Not Just a Pipeline 23
Nafta to the Russian oil company Transneft, and many saw the oil cut-off
as Russia’s way of punishing Latvia for insubordination. This suspicion
was not reduced when the Vice President of Transneft, Sergei Grigoriev,
blatantly declared: ‘Oil can only flow from Russia. You can of course sell
[the port] to Westerners, but what are they going to do with it? Turn it
into a beach?’ (cited in Baran 2006: 38).
Lithuania has had similar experiences with the Russians. Between 1998
and 2000, Transneft cut off oil supplies no less than nine times in order to
stop the Lithuanians from selling their port, pipeline and refinery to the
American company Williams International (Hamilton 2008b: 120-121).
Moreover, in July 2006, deliveries of crude oil through the Druzhba pipeline
to the Mažeikių Nafta refinery were abruptly stopped. The refinery is
the biggest commercial actor and most important taxpayer in Lithuania,
so the economic effect of the cut-off was significant. As with the
Ventspils cut-off, this one also followed a Russian failure to gain control
over energy infrastructure. In the preceding months, the Polish energy
company PKN Orlen had, through open auctions, acquired 84.36%
ownership of Mažeikių Nafta at the expense of Russian companies.
Therefore, when oil supplies to the refinery were stopped on 29 July
2006, officially due to a leak on Russian territory, suspicion grew that
this was an intentional cut-off (Baran 2006: 133; 2007: 14-15). As of
2008, the pipeline is still broken, and it is not likely that it will be
repaired. On 1 June 2007, the Russian Energy and Industry Minister
Viktor Khristenko announced that Russia in the future would supply the
Mažeikių refinery exclusively via the Baltic Sea, which significantly
raises the cost for Lithuania and PKN Orlen. Interestingly, the announcement
was made the day after Vilnius declared that it wanted to join the
U.S. plan for a missile defence system in Europe (Stratfor 2007).
Although Moscow would probably argue that its decision is based purely
on economic considerations, few Lithuanians are likely to be convinced
that the timing of the announcement was a coincidence.
In Estonia, a Russian gas cut-off occurred in 1993 after the implementation
of a new law on citizenship, which was aimed at clearing up the legal
status of non-Estonian residents. After its recent independence Estonia
had only granted automatic citizenship to those whose families had been
living in the country before the annexation by the Soviet Union in 1940;
others could become legal Estonians after a two-year waiting period and
by passing a demanding language test. As a result, some 600,000 people
(almost 40% of a population of 1.6 million) had become stateless. Under
the new law all non-Estonians, most of whom were Russians, would have
to apply for a residence permit within two years or else leave the country.
The law infuriated Moscow, which condemned it as ‘a form of ethnic
apartheid’ (New York Times 1993), and when gas deliveries were subsequently
halted it was difficult not to interpret it as a form of retaliation.
Perhaps to no surprise, Gazprom’s official explanation for the cut-off was
economic, namely that Estonia had unpaid debts of 10.5 billion roubles
(US $11 million) and that recent negotiations with the Estonian government
had not given the ‘desirable results’ (New York Times 1993).
Besides this incident there have been few energy-related problems in the
Russo-Estonian relationship. This may stem from the fact that Estonia is