W. Germans sign huge pipeline deal with Soviets and get just what they wanted
Bonn — The West Germans got what they wanted. The Russians got most of what they wanted, minus the timing. The Americans witnessed what they didn't want to witness.
These were the outcomes of the final signing Nov. 20 of the East-West ''deal of the century'': the long-pending $10-15 billion gas-for-pipeline contract.
Under it, West German, French, Italian, Dutch, and various other companies will supply some 3,500 miles of pipeline, with 41 compressors, from northern Siberia. Credits will be paid off by the early sales of an annual 40 billion cubic meters of natural gas from 1984 on for 25 years to companies in West Germany, France, Belgium, Austria, Italy, and the Netherlands.
Through the deal the West Germans - who will take a quarter of the gas - will diversify their energy imports. This has been a major economic goal for a nation that is about 65 percent reliant on foreign energy sources, many of them in the volatile Middle East.
Through the deal the West Germans will also double their gas dependency on the Soviet Union to 30 percent and their overall Soviet energy dependency to some 5 percent. It was this dependency - and the concomitant potential for Soviet blackmail of West Germany - that alarmed the Reagan administration and made it send a team at the eleventh hour to try to dissuade the West Germans from the contract.
The West Germans listened politely, figured that Mr. Reagan had sent the team as a pro forma exercise to pacify those in his entourage who favored waging economic warfare on the Soviet Union - then went ahead with the deal as they had said they would do from the beginning.
They calculate, as they explained to the American team, that even if the Russians turned off the gas altogether, they could quickly substitute other energy from Norway, the Netherlands, and their own stores, and thus resist any blackmail. To this end, they are deliberately channeling the gas primarily to large industry with capacity to switch to fuel oil on short notice, rather than to more vulnerable small business.
Politically, the West Germans - including Chancellor Helmut Schmidt - also calculate that such trade can have some stabilizing long-term impact on overall East-West relations. Besides helping to relieve world energy shortages by developing Soviet resources, it can reduce any economic incentive for the Soviet Union to take over Iran - a worry that loomed large in Washington a year ago.
In addition, the West Germans still believe that reliable Western trade links could give Moscow positive incentives for detente - other things being equal - in providing access to needed Western technology.
Explicitly, the Russians have already expressed interest in bilateral cooperation in nuclear (especially high temperature reactor), coal conversion, and chemical technology. On the West German side, any broad governmental technology cooperation agreement would depend on Soviet willingness - so far not in evidence - to include West Berlin in West German competence in implementing the cooperation.
The West Germans did, at the last minute, win a hookup of West Berlin to the new gas line. The details of the pipe construction across East Germany, however, remain to be worked out between West and East Germany.
The other point the Russians had to yield on was their desire to sign the agreement as the highlight of Soviet President Leonid Brezhnev's Nov. 22-25 visit to Bonn. With signature two days before the visit the Russians can still play the deal as a big success. But they will not have the photos of smiling Brezhnev and Schmidt with pens in hand. Formally they had to treat the contract simply as the nongovernmental, commercial, multilateral agreement it is (at least on the Western side).
The Soviet eagerness to complete the deal now, along with the past year's rise of interest rates in the West and the drop in energy demand in Western Europe, gave European negotiators a stronger hand in the talks than they started out with a few years ago.
The Nov. 20 contract under which Ruhrgas AG will import from Soyuzgas Export an annual 101/2 billion cubic meters of gas for 25 years caps a series of agreements that have been dribbling in over the past several months. Ruhrgas has led the gas consumer consortium. Germany's Mannesmann and France's Creusot-Loire have led the suppliers' consortium. American companies are participating directly by selling pipe-laying equipment and indirectly by licensing the most important turbine technology.
Unofficial calculations suggest contracts for West German firms worth about $ 4.5 billion, for French firms $3.5 billion, for Dutch and Italian firms $1 billion each, for Belgium $800 million and Japan $600 million.
For West Germany, which is already the Soviet Union's main Western trade partner, the new contracts should increase their trade above the level it has stagnated at over the past five years. Last year's bilateral trade represented 2 .3 percent of total West German foreign trade.