The United States has welcomed the decision by the international consortium developing Azerbaijan’s Shah Deniz gas field to choose the Trans-Adriatic Pipeline to deliver Caspian gas to Europe.
A State Department statement called the move "another important step in the process of advancing Europe’s energy security and promoting competition in the supply of energy resources."
The Trans-Adriatic Pipeline will take gas from the Turkish border through Greece, Albania, and across the Adriatic Sea to Italy.
The move is seen as reducing European dependence on Russian energy supplies.
EU officials unveiled a "Southern Corridor" energy route plan in 2009. This is a network of pipelines aimed at bringing Caspian Basin gas to Europe via routes that avoid Russian territory.
Around a quarter of Europe’s gas is supplied by Russia.
A State Department statement called the move "another important step in the process of advancing Europe’s energy security and promoting competition in the supply of energy resources."
The Trans-Adriatic Pipeline will take gas from the Turkish border through Greece, Albania, and across the Adriatic Sea to Italy.
The move is seen as reducing European dependence on Russian energy supplies.
EU officials unveiled a "Southern Corridor" energy route plan in 2009. This is a network of pipelines aimed at bringing Caspian Basin gas to Europe via routes that avoid Russian territory.
Around a quarter of Europe’s gas is supplied by Russia.
Iran, Russia plan joint naval exercise in Caspian Sea: Russian cmdr.
A top Russian Navy commander says his country and Iran are examining a plan to conduct a join naval exercise in the Caspian Sea in the second half of the current year.
Deputy Commander of Russia’s Caspian Flotilla Nikolai Yakubovsky announced the news after a Friday meeting with the commander of Iran’s naval fleet that has been dispatched to the Russian port city of Astrakhan, RIA Novosti reported.
In 2009, the two countries conducted their first joint naval maneuvers in the Caspian Sea, involving about 30 vessels.
Iran has dispatched two indigenously-built missile-launching warships to Astrakhan in a move to consolidate friendly relations between Tehran and Moscow.
During the Iranian naval fleet’s stay at Astrakhan Port, the Iranian naval officers will visit some military and port facilities in Russia and hold meetings with a number of high-ranking Russian commanders and officials.
On April 21, a group of Russian Navy warships docked at the southern Iranian port city of Bandar Abbas after a long journey from the Pacific Ocean.
The fleet, which comprised Admiral Panteleyev anti-submarine destroyer and the logistic battleships Peresvet and Admiral Nevelskoi vessel with a crew of 712, entered the Iranian naval zone in a bid to further strengthen relations between Tehran and Moscow and promote bilateral naval cooperation to maintain maritime security.
In recent years, Iran’s Navy has been increasing its presence in international waters to protect naval routes and provide security for merchant vessels and tankers.
The Islamic Republic has repeatedly asserted that its overseas naval presence is meant to convey a message of peace and friendship to other countries.
ASH/NN/HJL
Russia has won a big round in an almost two-decade battle with the West over the flow of natural gas from the Caspian Sea. But the June 28 victory is a mixed one for Moscow, for it helps undermine the rationale for another Russian project—one that has been a key weapon in the country’s fight for energy dominance.
The story is tangled, and before we move to the details, let’s just identify one suprising winner—long-suffering Greece. It will fall along the transit route for the Trans-Adriatic Pipeline (TAP), which beat Western-backed Nabucco, the line over which the West has fought Russia since the mid-1990s.
With TAP’s victory, crows Greek prime minister Antonis Samaras, the world should understand that economically struggling Greece is on its way to recovery. After all, “who would invest money in a country facing economic, social and political threats?” Samaras said in a statement.
The US schemed to keep Russia out of its backyard
The story goes back to the collapse of the Soviet Union. Having defeated its Cold War rival, the US drew a figurative line around the southern half of the USSR—the eight new states of the Caucasus and Central Asia—and announced a strategy to keep them from ever falling again into Moscow’s grip.
The US plan was to back the construction of oil and natural gas pipelines to carry the region’s energy to Western markets, avoiding Russian soil, and thus bolster their economic independence. In 2006, the first line materialized—the 1,100-mile Baku-Ceyhan oil pipeline from Azerbaijan to the Mediterranean. A companion natural gas pipeline soon followed. That took care of the Caucasus side of the Caspian.
But the Central Asian states, the so-called “stans,” turned out differently. There, the US and Europe envisioned a roughly 3,500-mile (5,600-kilometer) natural gas line starting in Turkmenistan, crossing west over the Caspian, and going on through to Europe. Such a line would provide Central Asia with the same independent economic channel as the Caucasus now enjoyed.
Routes of the proposed trans-Caspian, Baku-Ceyhan and other pipelines.Thomas Blomberg/Wikimedia Commons
Only, Turkmenistan balked. Year after year, it could not seem to commit to the proposed line, or any onshore drilling deal with a Western company to produce the needed gas exports. Some said Turkmenistan was afraid of Russia; others blamed its deep suspicions of all foreigners. Whatever the case, hopes for a decisive Turkmen embrace of a trans-Caspian pipeline seemed lost.
Then the US decided to abandon Central Asia
In 2002, the West pivoted. It proposed a new, shorter pipeline called Nabucco (named after a Verdi opera), which would skip Turkmenistan and instead start in Azerbaijan. This proposal seemed to have a better chance of success, but completely ignored the line’s original rationale—Central Asia would no longer be rescued from Russia’s grip. But the US and the European Union argued that, while they were no longer saving Central Asia, they could rescue Europe, which, they asserted, relied far too much on Russian natural gas. The effort gained particular momentum after 2006, when Russia, in aseries of disputes with Ukraine, shut off the natural gas supply temporarily to Europe.
In 2007, Russia’s Vladimir Putin responded with his own weapon—he would build “South Stream,” a $39 billion, 1,500-mile pipeline that, in a direct challenge to Nabucco, would carry Russian gas to the heart of Europe.
South StreamCourtesy: South Stream
But it seemed to many experts that the two lines—Nabucco and South Stream—were incompatible. For reasons of both supply and demand, only one would be financed and built.
Meanwhile, smaller players emerged that muddied Nabucco’s prospects for success in Azerbaijan. Among them was TAP, a relatively small line that would carry just one third of the volume promised by Nabucco, but would also cost a lot less.
TAP, Nabucco and other Caspian rivalsTAP
The climax came June 28. A BP-led consortium in Azerbaijan announced that it would build TAP. The decision appears, at least at this stage, to have rested on the economics. TAP came in cheaper even when Nabucco shortened itself even further into a compact version that it called “Nabucco West”.
By keeping the pressure on Nabucco, Putin provided time and breathing room for TAP to make its case. And that resulted in a much diminished threat to Russia’s dominance of the European gas market. TAP will supply just 10 billion cubic meters (about 330 billion cubic feet) a year of gas compared to the 30 billion cubic meters (1 trillion cubic feet) a year of gas that Nabucco originally proposed to ship into the continent.
With no Nabucco, what is South Stream’s rationale?
So Russia’s South Stream pipeline might now seem to have a clear road ahead. Putin has not yet commented, but in the past he has said that he will build South Stream regardless of Nabucco’s fate. And a series of bilateral agreements along its route suggest a project etched into stone.
Yet the math is challenging. In order to finance big oil deals signed June 21 with China, Russia’s heavily indebted Rosneft had to get pre-payments from Beijing totaling $60 billion-$70 billion. In aspeech on June 28, Alexei Miller, the CEO of Russian gas giant Gazprom, boasted of plans for enormous liquefied natural gas (LNG) plants in Vladivostok and on the Baltic Sea, toward an aspiration to supply 15% of the world’s LNG. Such plants cost billions of dollars. In short, Russia has a lot of competing needs for its cash.
Meanwhile, the European market is uninviting: Gas competition is stiff from Norway, Qatar and potential supplies by the end of the decade from the US, Israel and Mozambique. Europe is also turning to cheaper coal. And its energy appetite as a whole is stagnant at best.
So there is reason to at least call South Stream’s economic calculus into question. And now that Nabucco is dead, there is no glory to be won in it either.
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