Turkmenistan agreed upon a crucial cooperation with Iran and the EU. Russia signed an important contract about gas supplies with Azerbaijan. Moreover, it managed to gain support for its own massive project South Stream, which is a competitor to European Nabucco, as it is supposed to bring Russian gas to Europe through Black Sea. Turkey showed that it is going to be a crucial partner for any of these plans and that it is going to take advantage of this comfortable situation. Europe will have to make some big strategic decisions.
Never-ending story of Nabucco?
Nabucco was supposed to transport gas from Central Asia and the Middle East through Turkey to Europe and so reduce its energy dependence on Russia. However, the pipeline, named after a famous opera by Verdi, was from the beginning seen merely as a big political idea and not as a practically viable project. A consortium of five big energy companies, which were supposed to realise the project, were struggling with financial problems. These troubles were to a certain extent caused by the EU’s inability to clearly politically (and financially) support the pipeline project. Hungary, Germany, Bulgaria and Turkey in particular hesitated. Better days for Nabucco came with German company RWE joining the consortium. RWE’s advisor Joschka Fischer managed to break German political resistance. However, it was the gas crisis in January 2009 which blew new life into the project of the 3000 km long pipeline. Unstable (or completely cancelled) supplies of Russian gas in January severely hit Eastern European countries and scared Europeans so much that they started to work on Nabucco again. The Czech Presidency in the Council of the EU played a significant role in this process. In the first half of 2009 several important meetings took place (in Budapest, in Sofia and in Prague), where Czech representatives managed to secure the financial support from EU structures and to arrange contacts with potential gas suppliers. The question of who will be this gas supplier is the weakest point in the Nabucco project. Imports from Iran are, due to current sanctions and fierce opposition from the U.S., a politically impossible alternative, Iraq is too unstable, and the post-communist countries of Central Asia are seen as Russian satellites preferring trade with Russia or China. In this region Nabucco received unsuspected help in form of fierce conflict between Russia and Turkmenistan, caused by a suspicious explosion of a transit pipeline transporting gas from Turkmenistan to Russia. Turkmen president Gurbanguli Berdymuchamedov accused Moscow of being responsible for this explosion and refused to sign a prepared agreement on construction of a new pipeline. On the contrary, he offered to supply gas to the Nabucco pipeline. This was a huge boost for European project, as Turkmenistan possess world’s second largest reserves of natural gas. This put higher pressure on the EU to settle its internal disputes. When representatives of Turkey, Romania, Austria, Hungary and Bulgaria finally on July 13 signed an agreement on the realization of the project, it seemed that Nabucco definitely gained sufficient political and financial support and it was just a matter of time until it is completed.
Russia does not give up
However, just a few months later everything seems different. Russia has never really hidden its aim to defeat the Nabucco project. In 2007 Russia started its own massive South Stream project – a pipeline going from Russia under the Black Sea to Bulgaria and then through to Europe. South Stream is presented as a much simpler and more secure alternative to Nabucco. It is supposed to ensure stable gas supplies for Europe as, unlike Nabucco, it has a secure supplier (Russia) and does not cross unstable regions of Central Asia and the Caucasus. Moreover, it avoids Ukraine, which is today transits 80% of Russian gas supplies to Europe and is considered as the main cause of the January crisis and as a big obstacle of stable gas supplies. After the gas crisis Russia, just like Europe, started to pay much more attention to the energy questions. As a reaction to the European resurrection of Nabucco, Moscow undertook a few remarkable steps. Firstly, it focused on pulling over potential suppliers for Nabucco. Russia already secured supplies from Kazakhstan, Turkmenistan and Uzbekistan few years ago and on June 29, Moscow signed an treaty to buy gas from Azerbaijan 1000 m³. This is so far the highest price Russia pays for gas. It is even higher than this year’s price Russia gets from selling gas to Europe. This (in short-term uneconomic) measure has significant geo-strategic implications. Azerbaijan was so far seen as the most pro-European state in the region. President Aliyev until recently publicly supported the Nabucco project. Moreover, the Azerbaijani gas, unlike that from Turkmenistan or Kazakhstan is available instantly. Recently things got even worse for Nabucco, as we have witnessed unprecedented damage to the Turkish-Azerbaijani strategic relationship. The Turkish leading Party AKP has intensified its efforts for one-sided normalization of its relationship with Armenia. Official establishment of diplomatic relations between Turkey and Armenia evoked a very harsh reaction from Baku, which is still in war-like state with Armenia about the region of Nagorno-Karabakh. On October 14, when the Armenian President was in Ankara watching a football match with his Turkish counterpart, Azerbaijan signed a deal to sell each year 500 million m³ of natural gas to Gazprom. That is why Russian foreign minister Sergei Lavrov so actively supported the Turkish-Armenian agreement. Moscow managed to woo one of the most important potential suppliers for Nabucco.
A second, even more important achievement, was the gain of the key support for the South Stream project. In May five big energy companies from Russia, Italy, Bulgaria and Greece signed a deal on the construction of the pipeline. So Turkey remained the last country needed to join the project. This was settled when Turkish Prime Minister Erdogan signed on August 6 a deal with Vladimir Putin, offering Turkish part of Black Sea for the South Stream project, less than a month after he reluctantly signed the agreement on Nabucco. This meeting, attended also by Italian prime minister Silvio Berlusconi, provided the last piece of the jigsaw named South Stream.
What next?
There are two practically finished projects on the table now – European Nabucco and Russian South Stream. At first sight, these two projects seem very similar. Both are supposed to solve to problem of unstable gas supplies for Europe, both calculate with similar costs (around 8 billion euros) and both are supposed to go through Turkish territory and the Balkans to Central Europe. However, there is one crucial difference: the question of the gas supplier – Russia or states in Central Asia. Although representatives of EU, Turkey and Russia claim that these two projects are not mutually exclusive, it is almost certain that in fact they are. At least in foreseeable future they surely are. It is highly unlikely that there would be sufficient financial sources for two massive and very similar projects in the region severely hit by the financial crisis. Moreover, energy companies from Bulgaria and Hungary are supposed to participate in both projects, which is practically impossible. So, Europe will most likely in the near future face one of the most crucial strategic decisions in last decades: Nabucco or South Stream?
When making its decision, the EU will have to consider several factors, which recently became obvious. First of all, Europe has to realize, regardless Russia’s disapproval, that Central Asia is for the future a strategic partner of, not just regional, but world-wide importance. Some American strategists label post-communistic states in Central Asia as absolutely vital partners. China is trying to impose its influence in the region through the Shanghai Cooperation Organisation. India and Israel already undertook their first steps (through Turkey) as well. If Europe does not clarify its interests in the region soon, it might be too late – the interest of others is enormous. Secondly, Europe must finally accept the key strategic role of Turkey. Last NATO summit already revealed that Turkey is aware of its comfortable position. The acceptance of Russian South Stream project was just a further step. Moreover, it has been proven again that Europe needs Turkey more than Turkey needs Europe. Turkey still does not see this fact and tries heavily to become an EU member. Europe needs to take advantage of this situation and (without being blackmailed) clearly accept Turkey as its strategic partner. Third and most important factor, which EU members must take into consideration, is the fact that Russia is awake and prepared for counter-action. The last few months indicated that Moscow still possesses strong negotiating power, as it managed to pull-over key players as Italy, Turkey and Azerbaijan. The fact that in its new Strategic Conception Russia did not dismiss the possibility of a military conflict about energetic resources and its intensive efforts to defeat the Nabucco project should provide a warning to all European members. Russia is not willing to withdraw from its positions and is prepared for anything.
2009 has really been full of big geopolitical debates and decisions in the energy politics. The question whether Nabucco or South Stream is the most crucial strategic dilemma Europe has to face in the near future. However, it will also be a test of European integrity and unity. Today representatives of some countries are intensively lobbying for Nabucco, others fly to Moscow and some do not even care. It will be very interesting to observe, if (and under what conditions) European leaders will be able to reach an agreement in this vital question. It will reveal much not only about European potential to act as a world player, but also about its ability to simply survive as an integrated entity.
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