France, ignoring warnings by the United States, has agreed to buy 280 billion cubic feet of natural gas a year from the Soviet Union in a 25-year contract that will make this country dependent on the Soviets for a third of its imported gas needs.
The multibillion-dollar deal, announced today after five days of secret talks at an alpine ski resort, marked the first contract on such a large scale between a Western country and the Soviet Union since the Dec. 13 imposition of martial law in Poland and later U.S. efforts to organize economic sanctions against Moscow.
It underlined Europe's reluctance to get involved in the U.S. sanctions campaign and Europe's determination to go ahead with a $16 billion pipeline to bring Siberian natural gas to Western European nations whose industries have lucrative construction contracts for the project.
The Reagan administration, fearing that dependence on the Soviet Union for natural gas could affect international relations, has campaigned to dissuade the Europeans from dealing with Moscow on such a large scale, particularly since the Polish crisis. A senior U.S. defense official here earlier this week voiced hope that the project still can be called off.
Some officials in President Francois Mitterrand's government also raised questions about the danger of overreliance on the Soviets for a vital industrial need such as natural gas. Foreign Ministry sources said Mitterrand had on his desk earlier this month a recommendation that the purchase be reduced by one-fourth, arguing that the difference could be made up by increased purchases from Algeria.
This position was part of a debate within the government under way since the project was agreed on two years ago. But it was sharply reinforced by the Polish crisis, particularly in light of Mitterrand's strong denunciation of the military crackdown in Warsaw and his early willingness to point at Soviet responsibility in the crisis.
The agreement announced today was between the government utility, Gaz de France, and the Soviet gas-exporting organization, Soyuzgaz. Although it requires government approval, a spokesman for the state-run French utility said this is only a formality, implying that Mitterrand already has signed off on the contract's size.
The deal is to begin operation in 1984 if the Siberian pipeline is completed by then as scheduled. Although the price was not announced, French sources said the initial base price will be about $4.75 per million British thermal units (1,000 cubic feet) with provisions for fluctuations depending on currency values and inflation. As a result, the average price during the 25-year contract is likely to be higher than an initial $1.4 billion a year.
This is comparable to the price in a similar contract signed in November--before the Polish crisis--between Soyuzgaz and West Germany's Ruhrgas AG for import of 320 billion cubic feet a year. Italy, which signed in principle for 240 billion cubic feet a year in October, announced a suspension of the deal following the Polish tension. But French officials predicted that Italy, too, will go ahead once the crisis passes.
The United States has made clear its intention to delay or prevent the pipeline project, which would throw the contracts into doubt. As part of its sanctions, Washington has barred General Electric from exporting key turbine parts that were to supply the pipeline's European contractors. Questions also have arisen about other parts to be made under General Electric licenses purchased by European firms before the Polish crisis.
Some European officials have suggested, however, that other European firms could make the parts that are under embargo. NATO officials began meetings in Brussels today to determine what European firms can do without breaking a pledge by NATO governments to avoid undercutting U.S. sanctions by allowing the European companies to pick up contracts denied U.S. firms.
The European arguments are largely financial. The 3,400-mile pipeline project already has brought nearly $2 billion worth of contracts to French firms at a time when more than 2 million French citizens are out of work.
In addition, the Europeans say they are trying to reduce their dependence on the Arab states for energy. France, for example, imports almost all its petroleum, half of it from Saudi Arabia. French officials have estimated that because imports of Soviet crude oil are likely to decline in the future, France's dependence on the Soviet Union for its overall energy needs is likely to be unchanged from its present level of about 5 percent.
When the pipeline is completed, the Soviet Union plans to pump 1.13 billion cubic feet of natural gas a year from Siberia to Czechoslovakia's western border for sale to Western Europe. Besides France, West Germany and Italy, projected clients include the Netherlands, Austria, Switzerland, Spain, Luxembourg and Scandinavia.
French officials also argue that Paris has had good experiences in its current contract with the Soviet Union. Under this deal, France imports 113 million cubic feet of Soviet natural gas annually, about 14 percent of its needs.