ERDOGAN VISIT TO BAKU TO GIVE FRESH IMPETUS TO NABUCCO
Hurriyet
May 18 2010
Turkey
SALZBURG — Russian gas monopoly Gazprom has two options in front of
it. The first one is its present attitude of trying to maintain its
dominance over the European markets, blocking as much as it can the
projects that will reduce European dependence on Russia. The second
option is to understand that Europe’s search for diversification will
not diminish and thus to position itself accordingly.
Even if Gazprom opts for the second choice, experts believe Russia
will remain a key player in the European energy market. So what is at
stake for Russia is not about losing the European market but losing
its position as the sole and dominant player.
"We used to ask Gazprom officials why it is not looking for other
consumers like India or China, ceasing its grip from Europe. They
would tell us, ‘No, we will not leave European markets.’ In a way it
is understandable, as it took years too put the entire infrastructure
to Europe, it will take years to have a similar one toward the East,"
said a Turkish energy expert who was at the Salzburg Energy Seminar
last week where a session was dedicated to Russia and energy issues.
EU needs to get its act together for a common energy policy
If European countries want to reduce their dependence on Russian gas,
they should not take Russian current policy as a given and wait for
the days when Gazprom will decide to take the second option. They
should act. Yet the lack of any common energy policy despite five
years of intense talk raises serious doubts about the will among the
27 European countries to get their act together.
It is one of the biggest ironies that all the countries that are
supporting Russia’s South Stream project, except Turkey, are also
actively taking part in the Nabucco project, which aims at diversifying
energy supply and routes. Austria’s OMV is a key player in the Nabucco
project. Yet Austria recently become the seventh country to sign a deal
to join South Stream during Russian Prime Minister Vladimir Putin’s
visit to Vienna. While the Austrian officials are privately saying
that Nabucco remains a priority, their latest decision certainly does
not help the realization of Nabucco.
Austria gets 60 percent of its gas from Russia. "When they are so
dependent on Russia, it is difficult to say no to Russians when
Gazprom comes with a new deal," said the Turkish expert. Until there
is secure supply from another source, it will be very difficult for
EU countries to unilaterally dare to antagonize Russia
In order to overcome this difficulty, a European participant suggested
that the EU should endorse a diversification policy setting for
specific dates. Each member state would be obliged to commit itself
to a degree of diversification in its gas purchases which might enable
them to hide behind Brussels when dealing with Russia.
Erdogan visit to Baku might increase Nabucco chances
But in order to endorse such a binding policy, the EU should really
have confidence in the Nabucco project and work in order to make it
realized. Putin was right when he said there is not one single gas
contract signed to fill the Nabucco pipeline.
Yet Turkish Prime Minister Recep Tayyip Erdogan’s visit to Baku
might change the opinion of the skeptics, which question the supply
dimension of Nabucco. Ankara and Baku have reportedly agreed on the
transit fee for Azerbaijani natural gas that will pass from Turkey.
As the reconciliation and normalization process between Turkey
and Armenia, which had angered the Aliyev administration have
been suspended, the energy cooperation between the two capitals
will deepen. Erdogan’s visit and the deals that will be signed will
certainly come as a relief to the supporters of Nabucco. The following
next six month will still remain critical for Nabucco’s future as the
consortium will go on the market to strike commercial deals. It remains
to be seen how successful it will be. By the end of the year we might
have a better idea of which of the two main arteries that will bring
gas to Europe has more chance of being constructed than the first.