Foreign Correspondence

[Amaunet]

And Putin will be supplying Israel with natural gas


Russia extends natural gas pipeline to Israel

Memo to Jews: Don’t get too excited, Putin loves to fondle his power switch.

Note that Putin did not start aggressively harrassing Ukraine until Blue Stream, an alternate route to Europe, was officially inaugurated November 17. There must be a connection but I didn't see it reported anywhere. On the other hand you guys are certainly capable of beating the blogs and can at times pick up what they miss.

-Am


Russia to Cut Gas Price as Blue Stream Pipeline Extends to Israel
By Ercan Baysal, Ankara
Published: Saturday, February 04, 2006
zaman.com


A new pipeline project with Russia is on the agenda following the debates over natural gas cuts.

The project of extending the Blue Stream Natural Gas Pipeline through Israel will be implemented.


The Turkish Energy Ministry made another offer to Russia breaking the Turkish resistance on the issue with the promise "reduction in natural gas price".


The words of Russian Gazprom Chief Alexey Miller, "Turkish part delivered us interesting data," reportedly referred to the offer to extend the oil pipeline to be built between Samsun and Ceyhan through Israel in line with the Blue Stream.


Gazprom officials during the meeting defended they did not announce the natural gas prices, "It is not right to compare the natural gas prices implemented in several countries even if the prices are known because the shipping and transit costs vary."

Gazprom's top administration met Turkish Energy and Natural Sources Minister Hilmi Guler and Ministry and Botas administrators at the ministry building in Ankara yesterday.


Natural gas investments in Turkey similar to the second pipeline project in the Black Sea, and storing and transferring imports to the private sector were among the issues discussed.


Turkey brought the issue of price cuts to the agenda and repeated the proposal to build a gas liquefaction facility in Ceyhan.

According to the information received, the project of Russia demanding to transmit natural gas in Israel and Lebanon over the Mediterranean Sea was favored. In return, Gazprom agreed to reduce the natural gas price for Turkey.


Miller promised Gazprom will continue to fulfill its obligations on shipping natural gas to Turkey.


Declaring there is no difficulty caused by the company on gas stream, Miller pointed at Ukraine as the reason.


Gazprom Chief recorded the most fundamental alternative to provide security in Turkish gas exports is to build a "safe" oil pipeline passing through the Black Sea.


Miller's assistant Alexander Medvedev mentioned about the "price" disputes.


Revealing the natural gas price is determined based on "a formula and the oil prices" in the world, Medvedev noted information about "partnership conditions" is never released.


Reporting the natural gas price for Turkey has never been announced and will be kept "undisclosed", he denied the $260 sale price for Turkey.


http://www.zaman.com/?bl=economy&alt=&hn=29385


Blue Stream opens new horizons for Russia
By Federico Bordonaro

Nov 23, 2005

The Blue Stream gas pipeline between Turkey and Russia was officially inaugurated November 17. Its construction, undertaken by Russia, Turkey and Italy - involving a joint venture between Russia's gas giant Gazprom and Italy's energy major ENI - began in 1997.

At that time, it was sharply criticized as technically flawed (it runs at a record depth of 2,150 meters below the sea) and politically inopportune (since it was said to dangerously increase Turkey's dependence on Russia's gas supply).

Blue Stream's implementation confirms that Russia is using its



vast oil and gas reserves as a geopolitical wildcard. For instance, on Blue Stream's inauguration day, Russian President Vladimir Putin proposed the construction of new Russian-Turkish oil and gas pipelines.

Additionally, the success of Blue Stream highlights once again the major economic and strategic stakes of the broad area linking the southeastern Balkans, the Black Sea region and the Caspian Sea. Russia, Turkey, the European Union powers and the US are all involved in a complex geoeconomic competition.

Turkey: The energy bridge
The Blue Stream gas pipeline runs from the Izobilnoy gas plant in southern Russia across the Black Sea bed to the Turkish port of Samsun. The Russian section is 373 kilometers long (232 miles) and the Black Sea's section from Djugba to Samsun is 309 kilometers long (192 miles). Once in Turkey, the pipeline continues from Samsun to Ankara for about 501 kilometers (311 miles).

The Blue Stream pipeline comes after the US and British-backed Baku-Tbilisi-Ceyhan pipeline, known as the BTC, was finally completed early this year. The BTC has been repeatedly labeled as an "anti-Russian" project by many analysts. In fact, its significance appears to be in its capacity to transport Caspian resources from Azerbaijan (Baku) to Turkey (Ceyhan, and therefore southern Europe) through Georgia (Tbilisi), while avoiding Russian territory.

The US and the UK have steadfastly supported the BTC, notwithstanding sharp critiques about its costs and somewhat tortuous trajectory. The interesting fact is that, just as the Blue Stream project comes into being, Putin is calling for a reevaluation of the entire Turkish pipeline system. Putin suggested during the Blue Stream inauguration day to build a second Black Sea pipeline for both oil and gas transfer, which could raise the transportation capacity from this year's 3.7 billion cubic meters of gas to about 30 billion cubic meters.

Therefore, Turkey is emerging as the indispensable bridge to transfer Caspian and Black Sea resources to the West.

Some observers note how Putin's suggested second Black Sea pipeline would in turn open the way to a Samsun-Ceyhan link pipeline, which would connect the Blue Stream and the BTC. Ceyhan would then become a major energy hub - which is appealing to Turkish elites - but, at the same time, Russia would considerably enhance its role as an energy security provider for both Turkey and the EU. Thus, Moscow would then be able to balance US-UK influence in the region, although not from a military security point of view.

Russia as energy security provider
Russian giant Gazprom is likely to get the dominant position on the burgeoning gas market in Turkey, but Moscow's political and economic aim is to project such influence to all of southeastern Europe.

With the US rapidly becoming the first security provider for previously communist countries such as Romania, Bulgaria, Georgia and possibly soon Moldova, Moscow is apparently choosing the role of energy provider to project its influence in southeastern Europe, and, therefore, to the EU.

Such a pragmatic strategy confirms that today's confrontation among great powers tends to be mild and open to interesting combinations of engagement and competition. American geostrategy in the Black Sea region is obviously perceived as aggressive by military factions in Russia. However, instead of classically rebalancing the expansion of US military influence and installations in the region, we now witness a fairly "asymmetrical" reaction by Russia.

Moscow cannot compete with the US as a security provider and regional hegemon. This is due both to Russia's inability to cope with American military might and to regional powers' fears of resurgent Russian influence in the previous Warsaw Pact's area.

However, given Europe's need of fossil energy and the current instability in the Middle East, Russia's vast oil and gas reserves are a viable alternative to European countries' dependence on the American-controlled Middle East.

By enhancing its role as the main energy supplier to the Europeans (for instance, Russia is also involved in a northern European gas pipeline from Russia to Germany), Moscow is both boosting its export-oriented economic growth and increasing its influence in the diplomatic-strategic and geoeconomic European space. Lately, Germany and Italy have been the two Western European countries more eager to cooperate with Russia on energy projects.

The bottom line
According to some sources, "hawks" in the Turkish military are keen to strengthen strategic and economic ties with Russia since the EU continues to stagger on Ankara's accession to Europe, vexing influential decision-makers in Turkey. This will give Putin a window of opportunity to enhance Russia's position in the region as a crucial geopolitical actor for Europe's future energy security.

These developments are going to increase Russian-American competition from the Adriatic shores to the Caspian Sea. Such competition will be multifaceted. Where Moscow can cooperate with Beijing (such as in Central Asia), it could take the shape of a military-strategic one. In southeastern Europe, it will be much more centered on economic strategy.

Notwithstanding the increasing calls for alternatives to fossil energy, expect oil and gas supply to occupy the center stage in Europe's economic discourse in the near term, and look for other EU countries after Italy to reassess their energy strategies by shaping new energy relations with Russia.

Moreover, as Moscow resolutely and pragmatically uses its energy wildcard to both regain influence and protect its interests in southeastern Europe, its energy production and supply complex will further increase its financial power and political weight.

Published with permission of the Power and Interest News Report, an analysis-based publication that seeks to provide insight into various conflicts, regions and points of interest around the globe. All comments should be directed to [e-mail]