Turkey’s hopes of becoming an energy corridor rattled by alternative schemes
ISTANBUL – Turkey must act swiftly to ensure a newly proposed natural gas pipeline that will pump Russian gas to Europe under the Black Sea will not dash Ankara’s hopes of turning the country into an energy corridor for Europe. The European Union has been especially keen to develop alternative supply sources to its fast-growing natural gas market since a dispute between Moscow and Kiev disrupted flows of Russian gas through Ukraine last year. Turkey, which is seeking EU membership, has been seen as the most logical and stable transit route for energy supplies from the Caspian region and parts of the Middle East. The country has been eyed for four major gas pipelines, including the much-touted Nabucco project, as well as a Turkish-Italian oil pipeline. The newly announced South Stream pipeline project by Russia’s Gazprom and Italy’s Eni, however, could change things for Turkey if Ankara and Brussels do not move together to get the EU-backed lines on stream. «This is not good news for Turkey and it is not good news for Europe and its dependence on Russian gas,» said Fatih Birol, the chief economist of the International Energy Agency. «Turkey has all the geographical potential to be a transit country, but potential is not enough. You need political will of the resource countries, the transit countries and the consumer countries,» said Birol. Moscow’s retribution The EU-backed Nabucco pipeline to carry 31 billion cubic meters of natural gas to Europe was first conceived as a way of bypassing Russian gas which supplies 30 percent of the European market. EU demand is set to soar in coming years. But the five signatory countries to the pipeline – Austria, Bulgaria, Hungary, Romania and Turkey – have yet to establish a financing structure or secure the required gas for the project. The process of setting up a scheme for finance and resources is expected to begin this year. However, more doubt has been cast on the project as Austria and Hungary have each expressed interest in independent ventures with Gazprom instead. Some analysts believe South Stream is Moscow’s way of punishing Turkey for negotiating too long for a similar pipeline parallel to the Blue Stream that would have stretched from Russia under the Black Sea to Turkey and on to Europe. The current Blue Stream, with a capacity of 16 bcm, supplies energy import-dependent Turkey and has been eyed by Moscow for expansion and extension to ship resources further to Italy. «(South Stream) gives the Russians more leverage, they can say to the Turks if you don’t play ball with us, we will turn Bulgaria into an energy hub,» said Gareth Winrow, professor of international relations focusing on energy security at Bilgi University in Istanbul. Moscow is also doing feasibility studies with Serbia to route gas pipelines through Bulgaria. The South Stream announcement comes at a politically tense time, when the EU is courting Central Asian and Caspian states for the 4.6-billion-euro Nabucco project. Moscow, meanwhile, has also stepped up its presence in the region and earlier this year signed an agreement to expand Gazprom-owned pipeline infrastructure in Turkmenistan, Kazakhstan and Uzbekistan. Russia sells gas that it buys from Central Asia to third party countries. Turkish delays The proposed Gazprom-Eni pipeline has for now all but ended chances of Moscow working with Turkey on expanding Blue Stream and the project could also endanger other Turkey-routed pipelines if Europe and Turkey do not act quickly. The EU will have to coordinate its members to determine suppliers and a finance structure as well as push Ankara for pricing details in time to secure contracts in European markets before Russia and its South Stream does. European business leaders say Ankara has not defined a clear strategy in pricing any of the gas that crosses Turkish territory, a major hindrance to pushing business forward. Italian gas company Edison expressed interest in working with the Gazprom project this week, a move which could be seen as a surprise after supporting a Turkey-Greece pipeline, expected to be extended to Italy, which has seen several delays. «We are waiting for the Turkish government to define its strategy for implementing transit through Turkey,» said Elio Ruggeri, a project manager for Edison. Turkey’s economic growth has been at 6 percent for the past several years, while energy consumption growth has reached around 7 percent, said Vural Altay, deputy director general for energy at Turkey’s ministry of foreign affairs. «It is like a chess game, but we are determined to turn Turkey into an energy hub,» Altay said. Turkish Energy Minister Hilmi Guler shrugged off suggestions that South Stream would challenge Nabucco, although privately officials are extremely concerned about the country’s much-touted energy hub plan.
