Prime Minister Vladimir Putin has suggested Russia might call off construction of the Europe-bound Nord Stream natural gas pipeline unless Europe offers more support for the project.
The 7.4 billion euro ($NZ16.53 billion) export project is intended to bypass Poland and the Baltic countries, running from Russia to Europe along the bed of the Baltic Sea. Russia wants to diversify its westward export routes to decrease reliance on its neighbors.
However, some Baltic Sea nations oppose the pipeline on environmental grounds and it has added to European concerns about overreliance on Russian gas.
"Europe must decide whether it needs pipeline gas from Russia in the volumes we are offering or not. If not, we won't build this pipeline, we will instead build factories for liquefying gas and send the gas to global markets, including Europe," Putin said during a meeting with Finnish Prime Minister Matti Vanhanen, whose country is worried about the environmental impact.
But Putin warned coldly that it would be more expensive for Europe in the long run to buy liquefied natural gas, or LNG, from Russia -- and quipped that consumer nations could easily count the costs.
"But it will be more expensive for you -- that's the thing, that's it," he told Vanhanen. "So count, it's easy to count it all on a computer." Putin said "we cannot do it alone, and we won't," the ITAR-Tass news agency reported.
The 1,200-kilometre pipeline is intended to carry 55 billion cubic meters of gas each year from the northwestern Russian port of Vyborg to the northern German port of Greifswald, bypassing current routes through Poland, Belarus and Ukraine.
Work on the pipeline is scheduled to start next year and be completed by 2012.
Putin, who faced Western accusations during his presidency that he was using Russia's gas riches as an instrument of political pressure, has repeatedly said that energy supplies are a two-way street and that producers want stability orders from consumers.
Concerned about its growing dependence on imported oil and gas, the European Union is trying to widen its range of energy supplies and transport routes. It relies on Russia for about one quarter of its gas needs.
Russia's state-owned gas monopoly Gazprom currently holds 51 percent of the project, while German energy companies E.ON Ruhrgas AG and Wintershall AG each hold 20 percent. Dutch company Gasunie has a 9 percent share.
