Siberian pipeline order may help to let loose vast supplies for Europe by 1970 BY THE NEWS TEAM Russia is planning to export natural gas to west Europe for the first time, and in massive quan- tities. Inquiries this week by The Times in Moscow, Rome, Paris, Vienna, Linz and Munich have pieced together the story of a huge Austro-German steel order des- tined for western Siberia; of Rus- sian plans to sell methane to Italy, Austria, France and possibly west Germany; and of the conmmercial and strategic impact of the Soviet Union's new Drang nach Westen. It was in a crowded works canteen at Linz on November 17 last Year that the first public announcement of the Russians' intentions was made by Mr. Podgomy, the Soviet Presi- dent. then on a visit to thie ugly state-owned Voest steelworks in the town. He told Voest's management and workers that there were plans to build a methane pipeline from Russia to Italy and possibly France: it would cross Austrian territory. Would Voest like to tender for the construction of the part of the pipe that would be on Austrian soil? Collaboration with German firm Voest confirmed this week that it had taken up the invitation and sent off to Moscow an offer to build between 300.000 and 800.000 tons of pipe for the Austrian bit of the pipeline. We pointed out to Voest that the Austrian section was likely to be only about 250 miles long. and asked whether 800.000 tons of steel could profitably be employed over this small distance. It was also rather odd that the steel was being made to withstand temperatures of minus 60 degrees Centigrade, which is rarely encountered in Austria on even the coldest of davs. A further feature -was the size of the pipe. "hich at 48in. diameter was the biggest natural gas pipe in the world. Was it, we asked, really intended for Austria ? Voest finally agreed that it was going to an undisclosed destination outside Austria: and that in view of the large quantities required Voest was collaborating with the west German firm of Mannesmann in making the pipe. Inquiries in Vienna disclosed where the pipe was in fact going. it will form part of a twin 48in. line now being laid from the Tyumen area, in western Siberia. to Moscow. Tyumen is brimming over with natural gas (production there is ex- pected to reach 1 30,000m. cubic metres a year by the 1970s) and the Russians want western help in bring- ing it to Moscow. Once this line is ready-it could be in 1970-71-the Russians intend to let loose on western Europe massive exports of natural gas from the Ukraine, %hich at present supplies the Moscow area. From the Lvov gas terminal, just inside the Soviet Union, 10,000m. cubic metres of mrthane a year will be ready to pour into western Europe-over one-third of the amount, on one admittedly speculative calculation, that Britain expects to get from North Sea reserves. The Russians, whose negotiating team is led by Mr. Alexei Kortunov, the Minister for the Gas Industry, are in the thick of bargaining with prospective customers. Italy, the principal taker, expects to take six units (one unit=1,000 million cubic metres a year) by the 1970s, though they are still haggling over credit terms. On Tuesday night Professor Marcello Boldrini, the octogenarian statistician who succeeded Enrico Mattei as president of the state- owned E.N.I. hydrocarbons con- cern, flew back from Moscow to report on prospects for a resump- tion of full negotiations later this month. The Italians will certainly help to build the smaller west European pipeline that will bring the methane from Lvov by way of Tarvisig to Trieste and perhaps on to Marseilles. Like the Austrians, they will be paid for this in gas over perhaps seven years. Austrians expect to get a share The Austrians expect to take up to If units from the line as it swings from Vienna through the Carinthian mountains-a route which ar; American firm is being commis- sioned to survey. Tlere will be a tap line to Linz, where VWest is anxious to lay hands on some of the gas that it has helped to bring to Europe. That leaves 21 units on offer to France. This would be piped from Trieste across the Po valley and up the thin Genoese coastal strip to Marseilles. Gaz de France says it is giving special attention to this route, which would put Russian natural gas within easy reach of the energy- hungry industrial region round Lyons. If France declines, the Russians will have 2,500 million cubic metres Natural gas-nature's answer to currency problems. Boldrini of Italy: Negotiations resume this month. Schedl of Bavaria: Moscow's secondary target. Kortunov: Russian Minister with an eye on the west. a year of highly marketable metlrnne swilling round at Lvov. They will probably try to sell it to Bavaria by running another line across the flat Bavarian plain to Munich. Herr Otto Schedl, the Bavarian Economics Minister, told us in Munich that Russia was one possible source-Holland and nort-h Africa were others-from wihich Bavaria might buy natural gas for its growing needs. In the present relaxation o European tension there would be no ideological difficulties, he thought. A decision, in which the Bonn Govern- ment would have to be involved, is likely this year. Market in state of confusion Bavaria has not yet talked to the Russians about the project, but ministry officials say the Russians have been putting out feelers. Sources in Vienna close to Russo- Austrian negotiations say a line to Bavaria is the Russians' " fall back" plan. The news that the Russians are coming has thrown the international fuel market into confusion. The Italians have already broken off talks with Algeria over natural gas im- ports because of the Russian offer. Libya's west European markets are also threatenied. The Dutch, whose Slochteren fields are brimming with natural gas, are still trying to talk the Italians out of the Russian deal. Inter- national oil companies such as BP and Shell, already at odds with E.N.I. over its activities in Iraq, see in the Russian supplies a gmve danger to their Italian markets. Only Britain remains unaffected by the news. With the North Sea so close, this country has no need of Russia's methane; and our steel in- dustry, though short of orders. has not the capacity to make the giant pipe that the Russians want for west Siberia. Anyway, as one British steel man put it, the Ru6sians are such awkward customers. However, Britain, as a member of the North Atlantic Treaty Organiza- tion, is affected by the strategic impli- cations of the projected Russian pipeline. It has been argued that fuel, particularly oil, is a sinew of Projected Russia-Austria-Italy pipeline, with possible French and German extensions. war and that the west should neither become dependent on Russian sup- plies nor help the Russian distribu- tion network. In 1962 the Nato Council embar- goed, albeit ineffectively, the supply of large-diameter pipe by member states to communist countries-and that was for pipe over 19in. in diameter, never mind 48in. In 1964 a committee of the United States National Petroleum Council, whose co-chairman was Mr. Jerome J. O'Brien, director of the office of oil and gas in the United States Depart- ment of the Interior, gave a warn- ing to the west against accepting Soviet oil. Nato lifts embargo on pipes The committee's report described Soviet oil as the most important element in the Russian politico-econo- mic offensive against the free world. At about the same time Nato coun- tries reached a private joint under- standing to limit to 10 per cent the proportion of their energy supplies derived from the Soviet block. These cold-war atfitudes are un- likely to withstand the gentle warmth of Soviet methane. Seven days before Mr. Podgorny spoke at Linz the Nato Council issued a state- ment ending its embargo, saying that large-diameter pipe no longer had strategic significance. The United States State Department told The Times last week that the United States had no policy with regard to Italian gas imports from Russia. The Italians agree that by 1975 Russian gas will probably amoLnt to 33 per cent of the country's total gas consumption; but they say that Rus- sian oil and gas combined may account for only 8 per cent of total energy consumption-below the 10 per cent agreed with Nato. British oil industry sources say that Russian oil imports already account for roughly 10 per cent of Italy's energy consumption, and that Russian gas will bring this up to about 15 per cent. They also emphasize that natural gas brought by pipe is much more dependence-forming than oil or gas brought by tanker, as Italy's Soviet oil is now. There are plenty of oil tankers but at present very few natural gas tankers. If the Russians turned off the tap, they say, Italy could not re- place the missing fuel in a hurry. Oil line may be next venture The idea of massive Russian gas exports to the west originated in oil talks between the Russians and Signor Mattei in 1961-62, but it did not die with him in the mysterious air crash of 1962<CGradually the project increased in scoPe, as did the Russians' known reserves of natural gas. Within the past year the idea of getting the Austrians to help to build the Siberian pipeline was born and flourished. The Russians' motives seem to be almost entirely commercial. They want hard western currency and see the chance of getting some without paying a single rouble for it. But one hears stories in Vienna that their imagination is not yet exhausted. The idea of an oil pipeline to Italy, replacing the present tanker-borne trade, is said to be stirring in the corridors of the Kremlin. That would be another warm jet playing on the melting ice of the cold war. Siberian pipeline order may help to let loose vast supplies for Europe by 1970 Russians are coming west with their natural gas