http://www.guardian.co.uk/commentisfree/2009/jul/22/gas-energy-europe-serbia
A tale of two pipelines
The Nabucco and South Stream projects will secure gas for the EU – and
change the power balance in the Balkans
o Ian Bancroft
o guardian.co.uk, Wednesday 22 July 2009 07.00 BST
o Article history
The EU's long-delayed Nabucco pipeline has received an important boost with
the signing of an inter-governmental transit agreement between Turkey,
Bulgaria, Romania, Hungary and Austria. With Russia's rival South Stream
project having already secured the support of Italy, Serbia, Bulgaria and
Greece, the Balkans is gradually becoming a tale of two pipelines. The
outcome of these respective projects, therefore, will have far-reaching
implications not only for Europe's long-term energy security, but for the
strategic balance of the Balkans and the pressures facing the EU's
enlargement agenda.
The Nabucco pipeline, which is expected to cost around €9bn to construct and
be operational by 2014-15, is intended to dilute the EU's reliance on
Russian natural gas by transporting supplies from the Middle East and
Central Asia, via Turkey and the Balkans, into Europe. The project has to
date been afflicted by disagreements between Turkey and the EU over transit
terms, and between Turkey and Azerbaijan, widely regarded as one of
Nabucco's key potential suppliers.
Though Turkey's demands for 15% of the transited gas at discounted prices
have not been included in the agreement, they are likely to become a major
sticking point in the future, particularly if the EU continues to stifle
Turkey's EU membership prospects. Turkey's prime minister, Recep Tayyip
Erdogan, has been quick to emphasise how the Nabucco pipeline "will elevate
Turkey to a significant position" for European energy security, while José
Manuel Barroso spoke of "a new age in relations between Turkey and the
European Union". Despite growing calls for the EU to open the energy chapter
of the acquis communautaire, it remains extremely doubtful that Turkey's
growing strategic importance will be sufficient to sway countries such as
France and Cyprus to accept the prospect of it joining the EU anytime soon.
Important questions also remain over how the Nabucco pipeline will be funded
and from where sufficient quantities of natural gas will be secured in order
to ensure its long-term viability. At the end of June, Azerbaijan signed a
deal with Gazprom to sell natural gas to Russia from 2010 onwards.
Turkmenistan, meanwhile, recently finalized a 30-year agreement with China
for the purchase of natural gas; a move which challenges the respective
pursuits of Central Asian supplies by both Russia and Europe. Iraq and Iran,
the latter possessing the largest gas reserves in the world after Russia and
Turkmenistan, will therefore remain strategically important to Nabucco,
despite deep-seated instability in the former and political tensions with
the latter.
Russia, in comparison, facing fewer obstacles with respect to securing both
funding and gas supplies, signed an agreement with the national gas
companies of Italy, Serbia, Bulgaria and Greece in May 2009 for the
construction of South Stream, including a deal between Gazprom and Italy's
Eni to double its original planned capacity.
The inclusion of Serbia into the pipeline's proposed route, combined with
the construction of a gas storage facility at Banatski Dvor in Vojvodina,
will make the country a key regional energy hub. A June 2009 deal,
meanwhile, between Serbia's state gas monopoly, Srbijagas, and Republika
Srpska's gas company, Gaspromet, for the former to acquire a 40% stake in
the latter, will serve to further integrate Republika Srpska into South
Stream. By controlling the sole gas access point to Bosnia and Herzegovina,
whose lack of gas reserves were exposed during last winter's dispute between
Russia and the Ukraine, Serbia will therefore yield considerable influence
over its natural gas supplies.
Though Nabucco is widely anticipated in European circles, the obstacles it
faces in terms of securing sufficient and reliable supplies of natural gas
mean that it will struggle to fulfil the objectives for which it was
originally intended. Indeed, by elevating Turkey to a position of strategic
importance to Europe's energy security, Nabucco will invariably become a
bargaining tool given the former's aspirations for EU membership, thereby
further complicating the EU's enlargement agenda. With South Stream – which
will make Serbia a key regional energy hub – facing fewer obstacles to its
successful realisation, energy will therefore have ever more important
ramifications for the relative balance of power and influence in the
Balkans.
