Areas of vulnerability for the European energy supplies

Michael M. Gonchar NOMOS / Strategy XXI

Sliač/SielnicaJUNE 20th, 2013

New areas of hydrocarbons potential around New areas of hydrocarbons potential around Europe and new energy flows and routesEurope and new energy flows and routesfor XXI century: for XXI century:

• Central Asian and Caspian Areas (Turkmenistan, Central Asian and Caspian Areas (Turkmenistan, Kazakhstan, Azerbaijan)Kazakhstan, Azerbaijan)

• Black Sea shelf (Ukraine, Romania, Turkey) Black Sea shelf (Ukraine, Romania, Turkey) • Eastern Europe (unconventional gas fields in Eastern Europe (unconventional gas fields in

Poland, Ukraine, Romania, Bulgaria, Lithuania) Poland, Ukraine, Romania, Bulgaria, Lithuania) • Eastern Mediterranean (Turkey, Syria, Cyprus, Eastern Mediterranean (Turkey, Syria, Cyprus,

Israel, Lebanon) Israel, Lebanon) • Arctic area (Norway, Russia, Canada, Denmark Arctic area (Norway, Russia, Canada, Denmark

(Greenland))(Greenland))

Energy and transit sensitive areas with Energy and transit sensitive areas with potential of non-military and military tensionspotential of non-military and military tensions

Arctic area;Arctic area;

Eastern Europe;Eastern Europe;Black Sea;Black Sea;

Central Asia; Central Asia; Caspian Sea;Caspian Sea;S. Caucasus;S. Caucasus;

E. MediterraneanE. Mediterranean

Sakhara&SakhelSakhara&Sakhel

IInstability in Sakhel nstability in Sakhel means crash means crash

strategic projects strategic projects of energy supplies of energy supplies

to EUto EU

EUMENA

Qatari gas for Qatari gas for Europe Europe

(Doha vision): (Doha vision): combined route combined route

Qatar – S. Arabia – Qatar – S. Arabia – Jordan – Jordan – SyriaSyria gas gas

pipeline (blue) + pipeline (blue) + LNG tankers LNG tankers delivering delivering

insteadinstead long LNG tankers long LNG tankers

route around route around Arabian peninsulaArabian peninsula

(red) (red)

SYRIA

Russian energy resources Russian energy resources in official documents and statements:in official documents and statements:

• ""Russia has significant reserves of energy Russia has significant reserves of energy resources and powerful fuel and energy complex resources and powerful fuel and energy complex that forms background for development of the that forms background for development of the economics and instruments of internal and foreign economics and instruments of internal and foreign policies realizationpolicies realization“ “ ((Energy strategy of Russia till Energy strategy of Russia till 2020,2020, FirstFirst Edition 2003)Edition 2003)

• ““RussiaRussian oil and gasn oil and gas policy should be not just an policy should be not just an important part, but also one of the main important part, but also one of the main instruments of country’s foreign policy”instruments of country’s foreign policy”

Special Presidential Envoy to Africa, Head of the Council of Federation Committee

for Foreign Affairs Mikhail Margelov,November 18, 2011 г.

The scheme of future gas streams in accordance with Russian dreams or all routes are in Gazprom’s hands

NORD STREAM

SOUTH STREAM

YAMAL-EUROPE

MAINSTREAM.UA

TANAP+NABUCCO

Hub Baumgarten

European dimension of Gazprom’s bypasses:European dimension of Gazprom’s bypasses:Surplus of pipelines capacities from Russia is a Surplus of pipelines capacities from Russia is a challenge for stability of gas supply to Europechallenge for stability of gas supply to Europe

Route Capacities, bcma

Ukrainian mainstream 142

Belorussian direction 35

Blue Stream 16

North Stream + Finland 55+7

Nord Stream (III-IV) 55

Yamal – Europe - II 15

South Stream 63

Total: existing/future 255 / 388

Gazprom’s export to Europe–138 bcm in 2012(<113 bcm physically).

Contracted gas volumes (LTC) for 2020-2025 ~158 bcma

Surplus: 142 / 230 bcma

Trans-Caspian Gas Pipeline:Trans-Caspian Gas Pipeline:

Blue Fuel, GazpromExport Magazine:Blue Fuel, GazpromExport Magazine: «The construction of this pipeline would «The construction of this pipeline would mean to spit in the face of Russia and mean to spit in the face of Russia and the real risk may be that of a military the real risk may be that of a military conflict, in front of which Russia will not conflict, in front of which Russia will not pull back“pull back“

Institute of CIS CountriesInstitute of CIS Countries (RF):(RF): "After"After what NATO did in Yugoslavia, what NATO did in Yugoslavia, Afghanistan, Iraq, and Libya, there are Afghanistan, Iraq, and Libya, there are no any restraining barriers ... against no any restraining barriers ... against Russia's use of force in the CaspianRussia's use of force in the Caspian““

Russia plans to strengthen the Caspian Flotilla as Russia plans to strengthen the Caspian Flotilla as well as with "Bastion" shore-based missile well as with "Bastion" shore-based missile complexes, attack aircrafts. In 2013 it will be complexes, attack aircrafts. In 2013 it will be reinforced by 5 combat ships.reinforced by 5 combat ships.

Future gas supplies to Lithuania Future gas supplies to Lithuania and Ukraine are under risk of interruptions and Ukraine are under risk of interruptions

Possible interruptions

According to order dated November 2012 Kaliningrad interconnector has to be built

Yamal Europe - IIAccording to order dated April 2013

Euro-Arctic Euro-Arctic hydrocarbon resources hydrocarbon resources

promised to be:promised to be:82 Mtoe from 140 Mtoe 82 Mtoe from 140 Mtoe of all arctic resourcesof all arctic resources

GAS

OIL

After 2050 the hydrocarbon After 2050 the hydrocarbon exploration in the Arctic exploration in the Arctic

could be no less important could be no less important than the Persian Golf, North than the Persian Golf, North

Africa, the North Sea and Africa, the North Sea and the West Siberia are todaythe West Siberia are today

Priorities of foreign and military policyPriorities of foreign and military policy of Russia of Russia ((DecreesDecrees on on 7 7 MayMay 2012) 2012)

• Establishing of the Eurasian Economic Union by 2015

• Strengthening of the Tashkent Pact (CSTO)

• Making the maritime borders of the continental shelf, including in the Arctic

• Strengthening the Navy in the Arctic and the Far East

Arctic borders is a box of PandoraArctic borders is a box of Pandora

Russian Arctic

dreams

Arctic ambitious of RussiaArctic ambitious of RussiaInstitute for Political and Military Analysis of the RF:“Russia must begin the exploitation of the hydrocarbons on the shelf areas, which it consider to be its own”

• Increase of the icebreaker fleet (actual 6 nuclear + 2 diesel-electric) on 1 nuclear icebreaker until 2016.

• Formation of the Arctic Command and the group of forces with a strength of 10-12 thousands people during 2016-2010

• The Arctic Forces: - Murmansk (Marine Corps Regiment), - Pechenga (Mechanized Infantry Brigade)- Severomorsk (2 brigades of combat ships)

Reinforcement of the Northern Fleet of the RF by two Mistral

• Advanced adaptation of equipment and specialforces to the Arctic conditions

• Enhancement of reconnaissance in the Arctic region

SOME CONCLUSIONSSOME CONCLUSIONS

• More cooperation between NATO and EU concerning Security of Supply and Russian influences in the CEE Region is needed

• More NATO’s attention to C.Asia – Caspian Region - S.Caucasus – Black Sea chain is needed

• More attention to foreign activity of energy giants (Qatar, S.Arabia, Iran, Iraq etc.) and new big consumers (China, India) in Africa

• Arctic Forces Capacity Building development in the NATO framework

Thank you for Thank you for your attention!your attention!

NOMOS / Strategy XXINOMOS / Strategy XXI

http://geostrategy.org.uahttp://geostrategy.org.ua

www.nomos.com.uawww.nomos.com.ua

mi.gor17@gmail.commi.gor17@gmail.com