In the thick of energy strategy

The new, big game for control of the large oil and natural gas reserves in Central Asia around the Caspian and the Black seas is on. Greece is arguably part of that game. This is confirmed by the founding of the Greek-Turkish natural gas pipeline earlier this month, which creates a new prospect for the channeling of considerable quantities of natural gas from Central Asia to the big Central European markets. This pipeline will link the Turkish town of Karacabey with the Greek city of Komotini, covering 296 kilometers. It will continue to the west for 600km across northern Greece up to the area of Igoumenitsa in the northwest and then for 212km underwater to Otranto in Italy, connecting with the European pipeline network. There is another way to read this development: The new Greek-Turkish pipeline and its expansion to the west are part of the bigger game which Turkey plays – sometimes well, other times not so well, but always cleverly. If you carefully study a map of Turkey, you will see it really is full of pipelines carrying oil and natural gas from the north to the south and from the east to the west. Consider the underwater Russian-Turkish gas pipeline in the Black Sea, the new and very large Baku-Ceyhan pipeline carrying oil from the Caspian Sea to the Mediterranean, the natural gas pipeline linking Turkey with Iran, the initial Russian-Turkish natural gas pipeline from Bulgaria to Istanbul and from there to the east, and countless smaller pipelines. Turkey has justly emerged as the region’s actual energy junction. Gas surplus In the context of a really ambitious plan aimed at making Turkey the energy authority in the region, Ankara has recently rushed into signing dozens of long-term agreements to purchase large quantities of natural gas from nearly all countries in the region with rich reserves. Turkey would have used this natural gas to cover its ever-increasing domestic needs, while exporting a portion of it as electricity to its eastern neighbors. Unfortunately, Turkey’s economy did not grow as rapidly as hoped, while its international energy connections have been dramatically delayed. Trapped in inflexible interstate agreements with unfavorable take-or-pay terms, Turkey is now desperately trying to channel its surplus quantity of 6-12 billion cubic meters of gas per year until 2010 to the West. To this end, it also participates in the construction of the alternative «Nabucco» pipeline through Bulgaria, Romania, Hungary and Austria but its construction is not expected to begin before 2007 if all goes well, while its cost is calculated to be four times as much as the Greek-Turkish-Italian pipeline. Many people believe the urgency with which Greece agreed and signed a memorandum of cooperation with Edison of Italy (before the definitive study of the project) for the construction of this pipeline across the north will now serve Turkish commercial interests. That is so because Greece may in the long term earn some money from the carriage and possibly the acquisition of an alternative natural gas source, but Turkey will have achieved many times more benefits without any serious economic risk. Edison also seems to be obtaining considerable benefits, which are much greater than the Greek Public Gas Corporation (DEPA). The Italian company intends to reserve 80 percent of the pipeline’s capacity (with an annual carriage potential of 10-12 billion c.m.), while also wishing to secure 20 percent as an option. This means that Greece may theoretically not benefit by one single c.m. more than the particular agreement. At least DEPA has already contracted through a separate deal with Turkey’s Botas the import of 0.75 billion c.m. of gas per year from 2006, when the interconnection project under construction will be finished. Undoubtedly, the promotion of the Greek-Turkish pipeline and the construction of the pipeline across the Greek north, with a total length of 900km and worth of over 1 billion euros, is upgrading the geopolitical position of Greece and offers DEPA the opportunity to be linked with the European networks and participate in the continent’s market. This is very important for the current effort and the procedures to follow for the liberalization of the natural gas market according to EU directives. Opportunity missed Nevertheless, it is quite strange why, before Greece was committed to the construction of the Greek-Italian pipeline, the Foreign Ministry and others did not negotiate with Turkey. Ahead of the economic deadlock where Botas and Ankara are, we could have demanded certain energy returns in particular, regardless of the outcome, such as the consent for oil drills east of Thasos, forbidden by Turkey as a cause for war. When serious economic interests exist in international diplomacy, such arrangements are common practice. But in Greece the lack of long-term energy planning and our inability to accurately predict geopolitical issues deprives us even of the possibility to promote substantial national matters. (1) Costis Stambolis wrote this article for the Greek edition of Kathimerini.

Subscribe to our Newsletters

Enter your information below to receive our weekly newsletters with the latest insights, opinion pieces and current events straight to your inbox.

By signing up you are agreeing to our Terms of Service and Privacy Policy.