18 comments on Ukraine vs Russia: Tales of pipelines and dependence
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18 comments on Ukraine vs Russia: Tales of pipelines and dependence
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Today, the EU signs a memorandum of understanding with Kazakhstan on energy aimed at binding Europe closer to this vast country -- which stretches from the Caspian Sea to China.
Yesterday, EU Energy Commissioner Andris Piebalgs signed an accord on nuclear cooperation, with a view toward increasing Kazakhstan's share of uranium sales in the EU to 20% from 3%. Kazakhstan has one of the world's largest uranium reserves. Last week, Mr. Piebalgs, a Latvian who speaks fluent Russian, attended an EU-inspired meeting in Kazakhstan of regional energy ministers that produced a road map toward integrating their countries' energy grids and regulatory systems with the EU's.
Yet in all this flurry of documents and initiatives, the thing Mr. Piebalgs and many EU countries want most -- the construction of a gas pipeline across the Caspian Sea that would connect the gas-rich countries of Central Asia directly to Europe -- isn't mentioned.
Kazakhstan is critical to building the home stretch of a new southern energy corridor that would carry gas from the Caspian and beyond to the EU, via the Caucasus and Turkey. Such a corridor for the first time would allow the countries of Central Asia to sell gas directly to the EU, rather than to Russian gas monopoly OAO Gazprom, which can then re-export the gas at a high profit, as it does currently. Russia accounts for 44% of EU gas imports, a proportion that is expected to rise significantly, especially after Russia builds a northern gas corridor directly to Germany, under the Baltic Sea.
"The trans-Caspian gas pipeline for us is really important to take more seriously," Mr. Piebalgs said in an interview here. He said that by 2015, Kazakhstan could be producing 106 billion cubic meters of gas annually, about 20% more than Germany consumes each year. Turkmenistan and Uzbekistan, which also could supply the pipe, already are big producers.
A raft of pipelines to make this new East-West energy corridor are either in planning stages or under construction. A gas connector from Turkey to Greece and from there to Italy is being built. Another pipeline, known as Nabucco, is planned to take gas from Turkey north to Central Europe, Austria and beyond. Another, newer pipeline project, promoted since Gazprom cut off gas supplies to Ukraine in a price dispute last winter, would take gas across Georgia and directly to Ukraine and Romania via the Black Sea.
To make these pipe dreams a reality, there has to be gas to fill them. Russia is offering to expand its pipeline, called Blue Stream, across the Black Sea to Turkey, but that would increase the EU's dependency on Gazprom. Iran, with the world's second-biggest gas reserves, after Russia, could hook up to Turkey's grid and send gas to Europe, but relations between Tehran and the EU are poor. Connections to bring gas from Iraq and Egypt to Turkey also are possible but equally uncertain.
Gazprom is skeptical about the EU's pipeline ambitions. At a recent conference on the EU's external energy policy in Brussels, Gazprom Deputy Chairman Alexander Medvedev joked about the Nabucco project: "with names like that, pipelines don't get built."
Mr. Piebalgs is eager to secure a new southern gas route as soon as possible. Kazakhstan could choose to pipe its gas to China instead of Europe, even if the cost and distance involved would be far higher than crossing the Caspian. But Kazakhstan President Nursultan Nazarbayev, who visits Brussels this week, is proving cautious. Closely allied to Moscow, the Kazakh government is wary of inviting the kind of retribution that has met Georgia's snubbing of Russian power.
Nine oil- and gas-pipeline projects mentioned in an early draft of the Astana meeting's road map were all taken out, largely for fear of angering Russia over the trans-Caspian issue, according to an official familiar with the matter.
"It's too early to start talking about a trans-Caspian pipeline," Kazakh Energy Minister Baktykozha Izmukhambetov said in an interview yesterday, adding that the first thing to do is to agree with Russia on expanding capacity in the existing Russian pipeline routes.
Mr. Izmukhambetov agreed that Kazakhstan has a strong interest in selling its gas directly to Europe, but he noted that the EU and U.S. are launching feasibility studies for a potential trans-Caspian gas route. Only once those are complete will it be possible for Kazakhstan to judge if the project is commercially viable, and only then could negotiations with Russia start, he said.
Thxs for this info. I am really surprised this thread by Jerome has not generated a lot more comments from Europeans: surely their increasing Russian energy dependency must concern them. I also thought that PO + GW awareness was much higher in Europe than in the US, but maybe this perception is incorrect?
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
I wish there was a relatively painless way to get the 'American radar scope' fired up to detect what is coming.