Huge Soviet-Western Europe gas pipeline deal runs into snags
A multibillion dollar gas pipeline deal between the Soviet Union and Western Europe, seemingly primed for takeoff only a few months ago, has run into trouble , at least temporarily.
How negotiations move from here on history's most ambitious East-West commercial venture may help answer questions central to the prospects for overall East-West detente in the years to come. Among them:
* Will the Soviets be able to avoid a serious energy crisis, and a resultant shortfall in hard-currency earnings, without the deal? That is, how badly does Moscow need to sign.?
* Despite the overall strain in relations with Moscow, can the West Europeans afford to pass up obvious potential benefits from the deal, such as lots of contracts and lots of Soviet natural gas? That is, how badly do the West Europeans need to sign?
* How concertedly will Washington try to talk its Western allies out of signing with the Soviets? Will such talk work?
* Can the Soviets, get Japan to supply requisite equipment and financing for the project should talks with the Europeans get nowhere? They are said to have hinted as much to some Western Europeans.
The consensus among Western experts here is that, although the Soviet Union could conceivably get large-diameter pipes and other equipment from Japan, the key to the deal remains Western Europe -- particularly, West Germany.
The planned pipeline scheme, originally targeted for completion by 1985, would ferry more than 40 billion cubic meters of West Siberian natural gas yearly to West European customers, mostly to West Germany but also to France, Italy, and other countries.
European banks would finance the venture, with the Soviets paying back in gas. West European contractors would help bring the project to life, getting the natural gas from below Siberia's unfriendly permafrost floor.
Most Western analysts, including some close to the negotiations, argue that both sides stand to gain enourmously from the pipeline agreement and that the project will eventually go ahead.
Soviet officials routinely deny Western intelligence predictions of a looming energy crisis here.
But Soviet President Leonib Brezhnev, himself, has taken the lead in nudging the world's top oil-producing state away from dependence on oil, in favor of gas , nuclear energy, and other sources.
Energy output is especially important to the Soviets in that it is their top hard-currency earner abroad.
On the surface, the current snags in the gas deal are commercial.
The Soviets want lower interest rates on financing for the deal than West European bankers are willing to provide. Moscow is also said to seek a higher price tag on the gas than West Europeans are willing to accept.
A compromise had reportedly been worked out whereby the West Europeans would balance a concession in interest rates by charging more for equipment the Soviets would purchase for the project.
But since then, market interest rates have floated further upward, making that gap more difficult to bridge.
Western diplomats say three other, more political, elements also seem to have slowed progress on the deal.
First, tension has been heightening over Poland, making West European businessmen wonder whether they are negotiating a project that could soon fall victim to fallout from a Polish explosion.
Second, the young Reagan administration has reportedly made it clear Washington is concerned over a deal that would greatly increase Western energy dependence on the Soviets.
Finally, Western diplomats say, a Soviet tendency to take a sometimes bullyish approach to the talks has served so far to irk the West European partners and help snag an early agreement.