Caspian Report - Issue: 07 - Spring 2014
Radu Dudau 102 In spite of the lingering mistrust between Ankara and Israel, a pipeline connection from the Levantine Basin to Turkey seems to make most commercial sense. lations. Its construction, either completely or in part – that is, at least one of the four parallel 15.75 bcm/ year pipelines – hinges first of all on Moscow-Kiev political relations. The two countries could, at least in theory, find a compromise based on self-interest and allow natural gas flows to Europe to continue. Yet no stable regime of the Ukrainian gas transit and storage can be guaranteed absent affordable and sustainable gas prices for Ukraine, and the latter is highly unlikely as long as the political standoff remains in play. The situation can only reinforce Moscow’s resolve to build the pipeline. Moscow has for years used the South Stream concept as leverage in its frequent gas pricing disputes with Kiev. And Gazprom has surely found partners – governmental and corporate alike – in the EU and its southeastern vicinity willing to join the project. Nonetheless, in recent months, Brussels’s attitude toward South Stream has evolved from cold to glacial. In December 2013 the EC required that the six bilateral agreements 9 concluded between Russia and EU member states regarding the pipeline’s construction be renegotiated and aligned to the demands of Third Energy Package – price liberalisation and transparency of tariffs, ownership unbundling (i.e., companies cannot simultaneously hold production capacities and transmission lines), and non- discriminatory third party access to transport infrastructure. More recently, as an element of political retaliation against Russia’s conduct in Ukraine, the EC announced that construction of South Stream was not a priority for the EU and that political level negotiations to that effect have been frozen. 10 At the same time, some EU countries (most vocally, Bulgaria) and corporations (especially South Stream stakeholders) have defended the project’s importance to the EU’s supply security. For Romania, South Stream could become yet another external source of natural gas. The project’s first line could be finished as soon as 2015, so that new natural gas volumes could be imported in a couple of years through the Bulgaria-Romania interconnector. If several years ago, South Stream risked increasing Central and South Eastern European energy dependence on Russia, the changes outlined above demonstrate how it could offer a new and significant supply source in a competitive market environment –provided the 9. The six intergovernmental agreements were concluded between the governments of Russia and, respectively, Bulgaria, Hungary, Greece, Slovenia, Croatia, and Austria. Although not an EU member state, Serbia is also involved, as a member of the Energy Community. 10. novinite.com (2014), “EU Does Not Consider South Stream Priority – Official,” 19 April.
Russian President Vladimir Putin and Gazprom CEO Alexei Miller. 103 situation in Ukraine does not escalate and no “third round” of Western economic sanctions is applied. However, it remains of paramount importance that the EU energy market and competition legislation be scrupulously monitored and that the energy market liberalisation process be completed as planned, for only this can ensure that Russian natural gas will be perceived as a commercially valuable commodity, rather than as an instrument of political coercion. CASPIAN REPORT, sprıng 2014
- Page 54 and 55: Davide Tabarelli 52 of some 200 mil
- Page 56 and 57: Iran Nuclear Negotiations and Turke
- Page 58 and 59: Mehmet AkIf Okur 56 posal stated th
- Page 60 and 61: Iranian President Hassan Rouhani an
- Page 62 and 63: Mehmet AkIf Okur 60 The steps that
- Page 64 and 65: Mehmet AkIf Okur 62 It is possible
- Page 66 and 67: Frank Umbach 64 Strategic Perspecti
- Page 68 and 69: Frank Umbach 66 Many of the shale g
- Page 70 and 71: Frank Umbach 68 are considerably hi
- Page 72 and 73: Frank Umbach 70 The UK government i
- Page 74 and 75: With Russia’s President Vladimir
- Page 76 and 77: Frank Umbach 74 During the last thr
- Page 78 and 79: Frank Umbach 76 approved by the gov
- Page 80 and 81: Shale gas drilling rig. Frank Umbac
- Page 82 and 83: THE IMPORTANCE OF TAP FOR ITALY SOM
- Page 84 and 85: AntonIo SIleo 82 the end of 2011, g
- Page 86 and 87: AntonIo SIleo 84 Power generation o
- Page 88 and 89: ily limited because of the emergenc
- Page 90 and 91: AntonIo SIleo 88 ductant chemical r
- Page 92 and 93: AntonIo SIleo 90 emerge as a signif
- Page 94 and 95: Radu Dudau 92 Romania’s Energy St
- Page 96 and 97: Radu Dudau 94 countries pay for Rus
- Page 98 and 99: Radu Dudau 96 This industry, howeve
- Page 100 and 101: Radu Dudau 98 de facto monopolies i
- Page 102 and 103: Radu Dudau 100 In October 2013, the
- Page 106 and 107: caspian
- Page 108 and 109: Why World Oil Prices Should Be High
- Page 110 and 111: Luay Al-Khatteeb 108 for $1 of reve
- Page 112 and 113: emın akhundzada 110 Turkey as an E
- Page 114 and 115: emın akhundzada 112 markets. Given
- Page 116 and 117: emın akhundzada 114 First, it shou
- Page 118 and 119: FatIh Ozbay 116 Discussions about V
- Page 120 and 121: FatIh Ozbay 118 The Black Sea is a
- Page 122 and 123: FatIh Ozbay 120 these two countries
- Page 124 and 125: FatIh Ozbay 122 Montreux is quite s
- Page 126 and 127: MUbarIz Hasanov 124 Some Remarks on
- Page 128 and 129: Turkey will be USD 37 billion highe
Russian<br />
President<br />
Vladimir Putin<br />
and Gazprom<br />
CEO Alexei<br />
Miller.<br />
103<br />
situation in Ukraine does not escalate<br />
and no “third round” of Western<br />
economic sanctions is applied.<br />
However, it remains of paramount<br />
importance that the EU energy market<br />
and competition legislation be<br />
scrupulously monitored and that<br />
the energy market liberalisation<br />
process be completed as planned,<br />
for only this can ensure that Russian<br />
natural gas will be perceived as<br />
a commercially valuable commodity,<br />
rather than as an instrument of political<br />
coercion.<br />
CASPIAN REPORT, sprıng <strong>2014</strong>
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