Caspian Report - Issue: 08 - Fall 2014

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MANFRED HAFNER 22 THE DOCUMENT RECOGNIZED IN THE SOUTHERN GAS CORRIDOR ONE OF THE EU’S HIGHEST ENERGY SECURITY PRIORITIES. humanitarian crises in several Central and Eastern European countries that were strongly dependent on Russian gas supplies across Ukraine. This dispute has resulted in longterm economic consequences and affected the reputation of Russia as a reliable supplier and of Ukraine as a reliable transit country. The official document on which the Southern Gas Corridor is rooted is thus represented by the Communication delivered in 2008 by the EC: the “Second Strategic Energy Review – An EU Energy Security and Solidarity Action Plan.” 2 The document recognized in the Southern Gas Corridor one of the EU’s highest energy security priorities, outlying the need of a joint work between the EC, EU Member States and the countries concerned (Azerbaijan and Turkmenistan, Iraq and Mashreq countries) with the objective of rapidly securing firm commitments for the supply of natural gas and the construction of the pipelines necessary for all stages of its development. Uzbekistan and Iran were also mentioned in the Communication as potential partners, albeit only in a long-term scenario. After the release of this document, the EC invited representatives of the countries concerned to a Ministerial level meeting aimed at securing concrete progress of the initiative in May 2009. The summit, held in Prague and named “Southern Corridor - New Silk Road”, served to express the political support to the realization of the Southern Gas Corridor as an important and mutually beneficial initiative, aimed at promoting the common prosperity, stability and security of all countries involved. The countries participating at the summit declared to consider the Southern Gas Corridor concept as a modern Silk Road interconnecting countries and people from different regions and establishing the adequate framework, necessary for encouraging trade, multidirectional exchange of know-how, technologies and experience. Furthermore, the countries participating at the summit also agreed to give necessary political support and, where possible, technical and financial assistance to the development of a project already launched in 2002 by a consortium composed by OMV of Austria, MOL Group of Hungary, Bulgargaz of Bulgaria, Transgaz of Romania and BOTAŞ of Turkey: 3 Nabucco. THE RISE AND FALL OF NABUCCO In fact, in 2002 the five-company consortium agreed to cooperate on the development of Nabucco, a projected 3,800 kilometers (km) long pipeline with a capacity of 31 billion cubic metres per year (bcm/year) designed to carry natural gas extracted in Azerbaijan, Turkmenistan, Iraq, Iran and Egypt to Southeast and Central Europe via Turkey. 4 The Nabucco project immediately got an unprecedented political support from Turkey, the EU and the United States (US). 2. European Commission, Second Strategic Energy Review – An EU Energy Security and Solidarity Action Plan. COM(2008) 781 final, 13 November 2008. 3. The consortium was successively extended to RWE of Germany in 2008. 4. Gas flows from these producing countries would have reached the Turkish border as follow: via the South Caucasus Pipeline in the case of Azerbaijan; via Iran or the planned Trans-Caspian Pipeline in the case of Turkmenistan; via the planned extension of the Arab Gas Pipeline in the case of Iraq; via the Arab Gas Pipeline in the case of Egypt.
FIGURE 1 The Genesis of the Southern Gas Corridor: The Original Concept of Nabucco Source: Authors’ elaboration. Strong of the political backing For Turkey the project represented pendency on Russia. 6 the five transit countries in 2011. 11 a unique opportunity to realize its of Turkey, the EU and the US, the long-term strategic objective of becoming Nabucco project gradually advanced a key energy corridor between hydrocarbon rich countries in with the signature of the joint venture agreement between the East and energy importing European the five companies initially in- markets in the West. volved in the consortium in 2005, 7 with the signature of a declaration For the EU the project represented calling for the acceleration of the a major opportunity to diversify its Nabucco project by the EC and energy natural gas supplies away from Russia. For this reason Nabucco not only ministers from Austria, Hungary, Romania, Bulgaria and Turkey in 2006 got the financial support of the EU 5 with the signature of the first but also became the flagship project contract to supply natural of the Southern Gas Corridor. gas from Azerbaijan in 2008, 9 For the US the project represented with the signature of the intergovernmental an important geopolitical asset to agreement between reduce the EU natural gas dependency on Russia, exactly as the Baku- Tbilisi-Ceyhan oil pipeline served in the 1990s to reduce the EU oil de- the five transit countries in 2009 10 and, finally, with the signature of the project support agreements between the Nabucco consortium and each of 23 CASPIAN REPORT, FALL 2014 5. The European Commission awarded a grant in the amount of 50 percent of the estimated total eligible cost of the feasibility study including market analysis, and technical, economic and financial studies. 6. “U.S. throws weight behind EU’s Nabucco pipeline”, in Reuters, 22 February 2008. 7. “Nabucco Partners Sign Joint Venture Agreement”, in Middle East Economic Survey, 11 July 2005. 8. “EU Commission, Ministers Agree To Accelerate Nabucco Gas Project”, in Middle East Economic Survey, 3 July 2006. 9. “Azeri Energy Minister Announces Readiness To Join Nabucco Project”, in Middle East Economic Survey, 8 September 2008. 10. “Nabucco Partners Sign Intergovernmental Agreement”, in Middle East Economic Survey, 20 July 2009. 11. “Nabucco Legally Finalized as Transit States Sign Project Support Agreements”, in Novinite, 8 June 2011.
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RADU DUDAU 72 Russia, which depends
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RADU DUDAU 74 WHAT INTERNATIONAL LA
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RADU DUDAU 76 THE NEAR FUTURE WILL
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RADU DUDAU 78 THE UKRAINIAN GOVERNM
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Black Sea Serpents’ Island. RADU
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RADU DUDAU 86 IN TERMS OF ENERGY, A
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WHY RUSSIA SIGNED A MAJOR GAS CONTR
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MESUT HAKKI CASIN 90 I will focus o
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Russian President Vladimir Putin sh
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Figure II: Russian energy infrastru
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Kazakhstan President Nursultan Naza
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MESUT HAKKI CASIN 98 economic devel
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Figure IV: China’s gas import sou
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ARZU YORKAN 114 TURKEY’S RENEWABL
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ARZU YORKAN 116 is 12 th in the wor
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Figure 4: Solar Energy Potential At
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ARZU YORKAN 120 Figure 8: The share
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ARZU YORKAN 122 THE STRATEGY PAPER
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ARZU YORKAN 124 TURKEY HAS NOT YET
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CASPIAN
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THE EU AGREEMENT ON THE 2030 FRAMEW
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EU Commission President Jean Claude
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ROMAN RUKOMEDA 132 THE PHANTOM OF R
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Russia’s gas giant Gazprom CEO, A
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CASPIAN CALL FOR PAPERS 136 Caspian
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Caspian Report - Issue: 08 - Fall 2014

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