By Yuri Glushkov, exclusively for Vestnik Kavkaza
Gas agreements signed by Russia and Turkey during President Vladimir Putin’s visit to Ankara may revamp energy security in Europe. Pressure from the EU forced Russia to give up plans for construction of the South Stream pipeline on December 1. The $4.5 billion will not be wasted, the project will simply be adjusted geographically.
Blue Stream will get a giant twin
63 billion cubic meters for the South Stream will still reach the EU, but the route was switched from Bulgaria to Greece. Turkey will transit Russian gas. Gazprom (Russia) and BOTAS (Turkey) signed a memorandum of understanding which stipulates that the countries will be studying the construction of a pipeline to Turkey under the Black Sea. Another pipeline will be added to the existing Blue Stream. The latter will be expanded to increase gas capacity from 16 to 19 billion cubic meters.
Gazprom head Alexey Miller said that the new gas pipeline, which will run from Russia to Turkey under the Black Sea, will transport 14 billion cubic meters of gas to Turkey and about 50 billion cubic meters to Greece through Turkish territory.
Turkey will become a large energy hub of Europe, a center of energy corridors from the Middle East, the Caspian Region and Russia.
The corridor zone
Turning the pipeline from Bulgaria to Turkey and further to Greece, Russia entered the “responsibility zone” of the Southern Gas Corridor, the construction of which Azerbaijan and Turkey had started at the end of 2013. In December 2013, the consortium developing the Shah Deniz Field on the Caspian shelf initiated extension of the Baku-Tbilisi-Erzurum gas pipeline, construction of the Trans-Anatolia Pipeline (TANAP), which will connect the east and the west of the country. The initial capacity of TANAP will total 16 billion cubic meters. 6 billion cubic meters will be purchased by Turkey and the rest by Europe. The capacity will then be increased to 31 billion cubic meters.
The official ceremony of the project worth $20 billion took place in Baku on September 20, 2014. The Trans-Anatolia Pipeline will be ready for launch in late 2018, conclusion of infrastructure work within the framework of the second phase of Shah Deniz development was set for 2019.
The path of the Azerbaijani gas stream towards Europe will lie through Greece to Italy via the Trans-Adriatic Pipeline (TAP). Baku has been trying to split its interests apart with Gazprom for quite a while. Baku took Moscow’s interests into account when designing the South Stream and its connection with Baumgarten (Vienna), the location of the largest European gas hub. SOCAR (Azerbaijan) could have picked the Nabucco West route running through Bulgaria, Romania and Hungary to Austria. Generally, the old Nabucco is today’s connection of TANAP with Nabucco West. However, revival of the latter is unlikely because the complicated geopolitical conditions discourage everyone from “new adventures” with the European Commission.
Meeting in Greece
The meeting of SOCAR and Gazprom near the Greek border in Turkey will add a new configuration to the European energy security plan of 60 billion cubic meters. Russian and Turkish experts will certainly need to solve many technical problems. For example, it is unknown how Gazprom will enter the EU market in the context of the set market for 10 billion cubic meters of Azerbaijani gas in Greece, Albania and Italy. Clearly, Greece does not need that much gas, and its transportation system would not be advanced enough for the stream. This means that new agreements on pipeline construction will be needed with the EU.
SOCAR may offer Gazprom a solution. SOCAR is concluding the purchase of DESFA, a company controlling the gas transportation system in Greece. One of the obstacles in the purchase is the remarks of the EU that a gas supplier should not own the networks for gas distribution. DESFA pipes may be used to transport Russian gas instead and save Azerbaijan from any suspicions of monopolism.
On the other hand, it is unclear whether Turkey will be given the right to re-export Russian gas or it will be given the role of a mere gas holder. Another question is who will build the new hub and what the terms there would be? It seems doubtful that Turkey would agree to be a statist in the energy dialogue with Europe. Orientation towards Turkey may mean a change of Ukraine as a transit state for Russia. In the current situation and in mid-term developments, Turkey seems like a more reliable and flexible option than Ukraine.
Concerning the interests of Russia and Azerbaijan, Turkey is where Gazprom and SOCAR can realize their agreement on cooperation in markets of third parties and enter the EU market together. The legal basis for such a scenario has existed for a long time and has no obstacles to its realization.
Will economics bring Karabakh peace?
Economic cooperation between Russia, Turkey and Azerbaijan may help resolve crises in the South Caucasus, most importantly the Armenian-Azerbaijani Nagorno-Karabakh conflict. Notably, Turkish President Recep Tayyip Erdogan gave his Azerbaijani counterpart Ilham Aliyev a call before the visit of Vladimir Putin. He invited Aliyev to the G20 summit in Antalya next year and informed him about the Russian-Turkish agreements planned for signing.
The Karabakh problem was undoubtedly raised at the negotiations of Erdogan and Putin. Both politicians have direct interests in the issue. Armenian membership of the Eurasian Union requires a quick resolution of its border disputes. The Armenian-Azerbaijani borders remain closed. Otherwise, all Russian investments in the country would be locked or at least inefficient. Poor logistics emphasized that transit through Georgia, which has been moving away from the EaEU, is the culprit.
Turkey needs peace in the Caucasus, where it could realize its own interests as a partner of Russia and an ally of Azerbaijan. Clearly, only Russia can put pressure on Armenia to withdraw from the occupied territories of Azerbaijan around Nagorno-Karabakh. De-occupation would open borders, restore communications and form a basis for multilateral regional cooperation from which millions of inhabitants of the region would benefit. Moscow and Ankara have all the necessary opportunities to be guarantors of a new peace agreement between Baku and Yerevan without the need to involve any non-regional players, whose interests are often controversial and hazardous for the interests of the South Caucasus states.
Talks about certain agreements reached on a withdrawal of Armenian forces at a trilateral meeting of the Russian, Azerbaijani and Armenian presidents in Sochi have been ongoing since the summit. There have been no moves to withdraw from the Azerbaijani districts, despite UN resolutions and the logic of Armenia’s survival, as noted by Azerbaijani President Ilham Aliyev in an interview with the Russia 24 To channel. The presidential meeting of Russia and Turkey in Ankara may encourage Armenia to act.
Turkey is not only becoming a strategic partner of Russia, it is also turning into a geopolitical ally in creating a multi-polar world. Recent critical remarks by Turkish President Recep Tayyip Erdogan towards the U.S. in unison with speeches of Russian politicians often look more radical and harsh than Russia would dare. Moscow and Ankara have a common outlook on many aspects of the world, existing differences over the Syrian crisis have no effect on consensus and cooperation in the economy and other sectors. The gas, nuclear, commercial sectors and construction contracts worth billions have brought the two countries closer to each other. It is time for quantitative relations to transform into quality.