grp8 secb pipeline politics

7/31/2019 Grp8 SEcb Pipeline Politics

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The Great Energy GameOil and Gas Transit Politics in a purview of Central Asia

IMI 2011-2013

Section B Group 8

Amit Abhas 11PGDM068

Ashwani Raturi 11PGDM078

Loveleen Singh 11PGDM088

Praveen Sammetla 11PGDM099

Shilpa Grover 11PGDM109

Venugopal Kankani 11PGDM119


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ContentsCentral Asia and Its Strategic Importance .............................................................................................. 3

Historical Development ...................................................................................................................... 3

Russias Policy toward Central Asia in the Early 1990s ....................................................................... 3

Russias Policy toward Central Asia in the Late 1990s ........................................................................ 4

Russias Policy toward Central Asia under Putin................................................................................. 5

American Interest in Central Asia ....................................................................................................... 6

TransSiberian Pipeline: ......................................................................................................................... 7

Controversies surrounding the pipeline ............................................................................................. 7

Russia-Ukraine gas dispute ..................................................................................................................... 8

Mikhail Khodorkovsky: A victim of Oil Politics? .................................................................................. 8

Putin- Khodorkovsky Tussel ............................................................................................................ 9

Caspian Pipeline Consortium ................................................................................................................ 10

Baku-Novorossiysk Pipeline .................................................................................................................. 10

BakuSupsa Pipeline ............................................................................................................................ 11

BakuTbilisiCeyhan Pipeline ............................................................................................................... 12

Major issues raised by Turkey: .......................................................................................................... 12

Nabucco pipeline .................................................................................................................................. 13

Issues related to Nabucco: ................................................................................................................ 13

South Stream and Nabucco: Head to Head .......................................................................................... 14

Trans Caspian Gas Pipeline ................................................................................................................... 15

Changing games in Central Asia ............................................................................................................ 15

Nord Stream, TAP and TGI .................................................................................................................... 16

Blue Stream ........................................................................................................................................... 17

The TAPI Pipeline .................................................................................................................................. 18

The IPI Pipeline ...................................................................................................................................... 18

The Oman-India Pipeline ....................................................................................................................... 19

Role of Turkey ....................................................................................................................................... 21

The Turkish-EU problem ................................................................................................................... 21

References ............................................................................................................................................ 23


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Central Asia and Its Strategic Importance

Following the collapse of the USSR, Russia was initially indifferentborderline irritated, in

facttoward Central Asia. Not surprisingly, the regions fledgling nations looked for help

elsewhere as they ventured out of the Soviet nest. Russia soon became aware that it had lost agreat deal of influence in the region, but in the latter half of Pres. Boris Yeltsins tenure, it

regained very little clout since Central Asians perceived a disconnect between Russias

walk and talk. The era of Yeltsins successor, Vladimir Putin, witnessed both enhanced

focus and rigorous reassertion of Russian authority in the region.

Historical Development

The term Central Asia typically refers to the five former Soviet Republics of Kazakhstan,Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan. Russian tsars had conquered the

region by the late nineteenth century. The Great Game continued as Russia vied with the

British Empire for greater strategic influence in Central and South Asia. Attempting to

integrate Central Asia into their own imperial realm, the Russians invested heavily in

transportation infrastructure and agriculture; under the Soviet Union, integration and

absorption advanced with new vigour.During the Soviet period, the regions republics

supplied resources, served as places of exile, and hosted sites for nuclear testing, thedevelopment of biological weapons, and space launches. In 1991 leaders of the Central Asian

republics declared independence from the Soviet Union. Since then, relations among the

Central Asian nations have typically been limited or frosty, and some nations are outright

hostile toward each other. These relatively young nations often assume the position of

client states in respect to their former master even though they are wary of Moscows neo-

imperial ambitions.Regional experts attribute Russias lingering influence more to the

mixture of proximity, history, and shared culture than to adept foreign policy.

Russias Policy toward Central Asia in the Early 1990s

From the time the Soviet Union collapsed in 1991 to the mid-1990s, Russia was preoccupied

with revolutionary internal reforms and intensely focused on joining Europe. Consequently,

Yeltsin had no apparent strategy for Central Asia. Russia turned its back on Central Asia,

seeing it as an obstacle to its quest to join Europe and felt Central Asia was a nuisance that

restricted Moscow. Russias lethargic security, economic, and political policies towardCentral Asia during this period embody its annoyance. Russias security and military


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cooperation with Central Asia in the early 1990s was typified by very limited rhetoric and

even less action. Russia became obligated to several Central Asian states via the Tashkent

Collective Security Treaty of 1992, but in practice drastically downsized its military

cooperation.

Yeltsins early economic policies toward Central Asia were even more destructive than his

dissolution of Russias southern defence buffer zone. With the dissolution of the USSR these

countries were out of the Ruble zone, leaving the fledgling countries without currency. While

such Russian state practices wreaked havoc, newly formed private Russian companies (e.g.,

LUK Oil, etc.) vigorously pursued business arrangements in Central Asia, especially in the

area of natural resources

The proverb no gardener, no garden! aptly describes the results of Russias policy of

indifference toward Central Asia in the early 1990s. Due to Russias virtually nonexistent

cultivation in the security, economic, and political realms, it effectively lost the region. The

states of Central Asia, lacking military and economic strength and rapidly losing faith in

Russia, actively sought external guarantors of regional security and foreign assistance.

Russias Policy toward Central Asia in the Late 1990s

During the mid-1990s, Russias foreign policy took a new direction under new foreign

minister Yevgeny Primakov, appointed in 1996. His aim of restoring Russias regional

influence (known to many as the Primakov doctrine) took precedence over integration with

the West. Russia gradually took more interest in the region, perhaps in reaction to the Central

Asian nations ongoing efforts to forge new international relationships out of necessity. In

fact, Primakov wrote that the West was actively working to prevent Russia from having a

special role in the former Russian republics and accused the West of blocking Russian

attempts at a rapprochement with the region. During this time, Islamic radicals had taken

control of the Chechen Republic and the Taliban had gained control in Afghanistan, so

Russia had become more aware of radical Islams threat to its national security.

Russian efforts to achieve the Primakov doctrine in the economic realm were aimed primarily

at hydrocarbon transport. Moscow asserted its right to transport Central Asian

hydrocarbons across Russian territory and opposed efforts to bypass Russia. But other than

limited oil-export collaboration with Kazakhstan and Turkmenistan, Russia did not


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concentrate on strengthening economic cooperationin fact, overall trade volume decreased

below the level of the early 1990s.

Russias Policy toward Central Asia under Putin

Under Putins leadership, Russian policy toward Central Asia markedly changed from the

rhetoric largely unaccompanied by actions of the 1990s to a more determined, proactive

approach. Putin affirmed that Central Asia constitutes a major foreign policy priority and a

zone of Russian national interests, reflecting the Russian belief that while the Americans

are here now, we are in the region for ever. Russias activism in the realm of military and

security cooperation in the Putin years heralds an aspiring hegemony awakening after a long

hibernationattempting to make up for lost time and frustrated with outside influences in

its domain. In April 2000, Russia led members of the Collective Security Treaty in creating

rapid-reaction forces to combat terrorism; in 2001 Russia established the Kyrgyz branch of

Moscows CIS Anti-Terrorism centre. Following 9/11, Putin justified American presence in

the region as a helpful defence against the Taliban and the Islamic Movement of

Uzbekistanclear threats to Russian interests.

Under Putins leadership, Russia also reasserted its economic interests in Central Asia,

especially regarding hydrocarbons. Russia views these resources as both a strategic assetand a strategic instrument. As an asset, Central Asian hydrocarbons are vital for Russias

trade with Europe, the main importer of Russian energy resources. For example, gas exports

from Turkmenistan and Uzbekistan supplied Russias domestic market at very low prices,

enabling Russia to sell its Western Siberian gas to Europe at much higher prices (e.g., $100

per 1,000 cubic meters versus $250 per 1,000 cubic meters).

With regard to viewing hydrocarbons as an instrument, Russias monopoly on export

pipelines enables Moscow to pressure Central Asian states to yield control of their

hydrocarbons. The 200730 plan published by Russias Institute of Energy Strategy

unambiguously states that Russian control over a large share of Central Asian gas needs to

be maintained. Russias claim that it has no imperialistic intentions in Central Asia does not

mesh with the facts. That is, its pipeline monopoly allows Moscow to pay far below market

price for gas; Russian unwillingness to invest in the industry prevents suppliers from

competing on a global scale; and attempts by suppliers to diversify export routes are seen as


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a threat to Russianvital interests. Foreign Minister Sergei Lavrov has even threatened to

use every conceivable economic pressure tactic against uncooperative CIS regimes .

Russian policy toward Central Asia under Putin had mixed results. On the one hand, Russia

regained some of the confidence lost during Yeltsins tenure through its more stable,

pragmatic, and well-funded policies. Catering to Central Asian autocrats heartfelt

vulnerability in light of Saddam Husseins overthrow and Georgias Rose Revolution,

Russian policy makers portrayed their image as a traditional, reliable partner. On the other

hand, Russias consistent, paternalistic attitude toward its unequal partners has been

harshly criticized by some of the regions leaders. Furthermore, scholars have noted that

Russia perceived the geostrategic importance of the region too narrowlyas a mere tool for

reviving its great-power status and securing its energy supply.

American Interest in Central Asia

In spite of the construction in 2002 of bases in Central Asia to support the military campaign

in Afghanistan, the primary U.S. interest in Central Asia is not strategic. Central Asia's

importance to the United States is not as a bulwark against regional powers such as Russia,

China, or even Iran. Nor is it to protect American commercial concerns in the exploitation of

Caspian energy resources. The primary American interest is in security, in preventing the"Afghanicization" of Central Asia and the spawning of more terrorist groups with

transnational reach that can threaten the stability of all the interlocking regions and strike the

United States.

As a result, in Central Asia, America's focus is now on creating strong security ties with the

statesbuilding on military-military contacts established in the late 1990sand on securing

long-term access agreements to regional bases and military facilities, which can be used to

respond to current and future security threats in Afghanistan. However, the primary goal for

U.S. policy must also be to enhance Central Asia's developmentnot just its military role. Like

Afghanistan, if they are to transform themselves from potential breeding grounds for

transnational terrorists into viable, stable states, the Central Asian countries must liberalize

economically and democratize politically.


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Trans Siberian Pipeline:

The UrengoyPomaryUzhgorod pipeline (also known as the West-Siberian Pipeline, or

Trans-Siberian Pipeline) is one of Russia's main natural gas export pipelines, partially owned

and operated by Ukraine. The pipeline was constructed in 1982-1984. It created the

transcontinental gas transportation system Western Siberia-Western Europe.

Controversies surrounding the pipeline

The erstwhile Soviets plans to build the pipeline were considered a threat to the balance of

energy trade in Europe, and were strongly opposed by the Reagan administration. The United

States prevented U.S. companies from selling supplies to the Soviets for the pipeline, as part

of what was also retribution against the Soviets for their policies towards Poland.

America's Western European allies, however, refused to bow to U.S. pressure to boycott the

pipeline, insisting that contracts already signed between the Soviets and European companies

needed to be honoured. This led to several European companies being sanctioned by the U.S.

Government. Reagan reportedly said "Well, they can have their damned pipeline, but not

with American equipment and not with American technology." The efforts by the U.S.

pressure to prevent the construction of the pipeline, and its export embargo of supplies for the

pipeline (19801984) constituted one of the most severe transatlantic crises of the Cold War.


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Russia-Ukraine gas dispute

The RussiaUkraine gas disputes refer to a number of disputes between Ukrainian oil and gas

company Naftogaz Ukrainy and Russian gas supplier Gazprom over natural gas supplies,prices, and debts. These disputes have grown beyond simple business disputes into

transnational political issuesinvolving political leaders from several countriesthat

threaten natural gas supplies in numerous European countries dependent on natural gas

imports from Russian suppliers, which are transported through Ukraine.A number of issues

that keep emerging as a result of this dispute are:

Whether Ukraine is using the supplies for its domestic consumption? Are Ukraine's actions

being orchestrated by the United States?

Whether Russia is exerting pressure on Ukrainian politicians or attempting to subvert EU and

NATO expansions to include Ukraine?

A serious dispute began in March 2005 over the price of natural gas supplied and the cost of

transit. During this conflict, Russia claimed Ukraine was not paying for gas, but diverting it

to be exported to the EU from the pipelines. Ukrainian officials at first denied the accusation,

but later Naftogaz admitted that natural gas intended for other European countries wasretained and used for domestic needs. The dispute reached a crescendo on January 1, 2006,

when Russia cut off all gas supplies passing through Ukrainian territory. On January 4, 2006,

a preliminary agreement between Russia and Ukraine was achieved, and the supply was

restored. The situation calmed until October 2007 when new disputes began over Ukrainian

gas debts. This led to reduction of gas supplies in March 2008. During the last months of

2008, relations once again became tense when Ukraine and Russia could not agree on the

debts owed by Ukraine.

Mikhail Khodorkovsky: A victim of Oil Politics?

In 2004, Mikhail Khodorkovsky was the wealthiest man in Russia and one of the richest

people in the world, ranked 16th on Forbes list of billionaire.

Khodorkovsky had worked his way up the Communist apparatus during the Soviet years, and

began several businesses during the era of glasnost and perestroika. After the dissolution of

the Soviet Union, he accumulated wealth through the development of Siberian oil fields as

the head of Yukos, one of the largest Russian companies to emerge from the privatization of


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state assets during the 1990s.His riches to rags story truly symbolizes the brutal nature of Oil

Politics.

Putin- Khodorkovsky Tussel

In April 2003,Khodorkovsky announced that his business enterprise, called Yukos wouldmerge with Sibneft, creating an oil company with reserves equal to those of Western

petroleum multinationals. Khodorkovsky had been reported to be negotiating with

ExxonMobil and ChevronTexaco about them taking a large stake in Yukos. Sibneft was

created in 1995, at the suggestion of Boris Berezovsky, comprising some of the most valuable

assets of a state-owned oil company. In a controversial auction process, Berezovsky acquired

50% of the company at what most agree was a very low price.

When Berezovsky had a confrontation with Putin, and felt compelled to leave Russia for

London (where he was granted asylum) he assigned his shares in Sibneft to Roman

Abramovich. Abramovich subsequently agreed to the merger.

With 19.5 billion barrels (3 km) of oil and gas, the merged entity would have owned the

second-largest oil and gas reserves in the world after ExxonMobil and would have been the

fourth largest in the world in terms of production, pumping 2.3 million barrels (370,000 m)

of crude a day. However, the merger had been recalled by the shareholders of Sibneft after

the arrest of Khodorkovsky, during the Vladimir Putins reign.

Thus, Vladimir Putin shrewdly tried to regain the power that Russias had lost to some extent

during Yeltsins reign.


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Caspian Pipeline Consortium

Established in 1992 Russian, Kazakhstani and Omani governments with 8 other oil

companies -Chevron, Mobil, LUKoil, Royal Dutch Shell , Rosneft and BP. It acted as a major

route for transportation of oil from Russia (Uzen) to West (Europe and US).

Earlier, the oil was transported through sea route from Russia and it was very costly for the

west. To reduce the costs, CPC-pipeline was built. The pipeline was still not economical to

US because of the transportation cost and it increased control of oil by Russia, which US was

objecting.

Baku-Novorossiysk Pipeline

After the disintegration of Soviet Union in 1991, the State of Central Asia started actively

involving in Oil production and one of the major was by Azerbaijan. The Western countries

saw this as an opportunity and started influencing the States. The initial pipeline starts from

Uzen and ends at Novorossiysk from where the West use to transport the Oil through Black

Sea. With Oil production at Baku, the pipeline was set up in 1997 from Baku to Novorossiysk

reduced the cost further. Majorly, it reduced the control of Russia.
http://en.wikipedia.org/wiki/ExxonMobilhttp://en.wikipedia.org/wiki/LUKoilhttp://en.wikipedia.org/wiki/Royal_Dutch_Shellhttp://en.wikipedia.org/wiki/Rosnefthttp://en.wikipedia.org/wiki/BPhttp://en.wikipedia.org/wiki/BPhttp://en.wikipedia.org/wiki/Rosnefthttp://en.wikipedia.org/wiki/Royal_Dutch_Shellhttp://en.wikipedia.org/wiki/LUKoilhttp://en.wikipedia.org/wiki/ExxonMobil


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Over the years, the historic Russian line from Baku through Chechnya to Novorossiysk was

closed because of the Chechens continuing struggle with Russia. Both sides reportedly hit the

pipeline during the wars, and Chechens exploited it as a source of free oil. Reports from the

region indicate that Chechens placed more than 100 taps on the line, drawing off oil to their

clandestine refineries and selling cheap gasoline in Grozny. Russia has recently completed a

bypass around Chechnya and reactivated the pipeline. Russia has proposed exporting oil

north to join its existing pipeline system and reach Novorossiysk or Europe but this would

increase the cost further hence US and Europe dint support the idea.

Baku Supsa Pipeline

At the core of the struggle is a vast network of actual and planned pipe - lines for shippingCaspian Sea oil to the world market from countries that were once part of the Soviet empire.

But with the disintegration of Soviet Union, American policymakers started working with a

BP-led consortium in the States around Caspian Sea to build oil and natural gas pipelines

across Georgia to the Turkish coast which would reduce the control of Russia.

Set up in 1999, it is controlled by Azerbaijan International Operating Company, SOCAR and

the Government of Georgia. Due to South Ossetia War or Russo-Georgian War in August

2008 between Georgia on one side, and Russia & separatist governments ofSouth

Ossetia and Abkhazia on the other. The pipeline was closed by BP.
http://en.wikipedia.org/wiki/Azerbaijan_International_Operating_Companyhttp://en.wikipedia.org/wiki/State_Oil_Company_of_Azerbaijan_Republichttp://en.wikipedia.org/wiki/Georgia_(country)http://en.wikipedia.org/wiki/Russiahttp://en.wikipedia.org/wiki/Separatismhttp://en.wikipedia.org/wiki/South_Ossetiahttp://en.wikipedia.org/wiki/South_Ossetiahttp://en.wikipedia.org/wiki/Abkhaziahttp://en.wikipedia.org/wiki/Abkhaziahttp://en.wikipedia.org/wiki/South_Ossetiahttp://en.wikipedia.org/wiki/South_Ossetiahttp://en.wikipedia.org/wiki/Separatismhttp://en.wikipedia.org/wiki/Russiahttp://en.wikipedia.org/wiki/Georgia_(country)http://en.wikipedia.org/wiki/State_Oil_Company_of_Azerbaijan_Republichttp://en.wikipedia.org/wiki/Azerbaijan_International_Operating_Company


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BakuTbilisiCeyhan Pipeline

This is one of those pipelines, which shows the direct influence of US on Turkey. US and

Europe used the black sea to transport oil from Baku- Supsa pipeline using Ships. As it was

still not economical for US to use this way, US started pressuring Turkey to support it. Butthe main reason was that US agreed to provide Turkey with many sanctions if a new pipeline

was built from Baku to Ceyhan which reduced the transportation cost for US.

Even before its completion, the BTC pipeline was having an effect on the world's oil politics.

The South Caucasus, previously seen as Russia's backyard, is now a region of great strategic

significance. The U.S. and other Western nations have become much more involved in the

affairs of the three nations through which oil will flow. The countries have been trying to use

the involvement as a counterbalance to Russian and Iranian economic and military

dominance in the region. Russian specialists claim that the pipeline will weaken the Russian

influence in the Caucasus. The Russian Parliament Foreign Affairs Committee

chairman Konstantin Kosachev stated that the United States and other Western countries are

planning to station soldiers in the Caucasus on the pretext of instability in regions through

which the pipeline passes. The project also constitutes an important leg of the EastWest

energy corridor, gaining Turkey greater geopolitical importance.

Major issues raised by Turkey:

Transportation through Bosporus which is a geologically unstable zone can be a threat

and can cause tanker wrecks

Concerned with global warming, argued that the world should be curtailing the

burning of hydrocarbons, not increasing it

The pipeline was operational from 2005 and US extended large credits to Turkey to help

finance the pipeline. Also, United States and other Western stationed soldiers in the Caucasus

on the pretext of instability in regions through which the pipeline passes. It is the second

longest oil pipeline in the former Soviet Union after the Druzhba pipeline.
http://en.wikipedia.org/wiki/Petroleum_politicshttp://en.wikipedia.org/wiki/South_Caucasushttp://en.wikipedia.org/w/index.php?title=Konstantin_Kosachev&action=edit&redlink=1http://en.wikipedia.org/wiki/Pipeline_transporthttp://en.wikipedia.org/wiki/Druzhba_pipelinehttp://en.wikipedia.org/wiki/Druzhba_pipelinehttp://en.wikipedia.org/wiki/Pipeline_transporthttp://en.wikipedia.org/w/index.php?title=Konstantin_Kosachev&action=edit&redlink=1http://en.wikipedia.org/wiki/South_Caucasushttp://en.wikipedia.org/wiki/Petroleum_politics


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Nabucco pipeline

The Nabucco pipeline (also referred as TurkeyAustria gas pipeline) is a proposed natural

gas pipeline from Erzurum in Turkey to Baumgarten an der

March in Austria diversifying natural gas suppliers and delivery routes for Europe. Thepipeline attempts to lessen European dependence on Russian energy. The project is backed by

several European Union states and is seen as rival to the South Stream pipeline project. At

the same time, there are some doubts concerning viability of supplies.

Issues related to Nabucco:

Supply limited to countries in South-East and Central Europe

A pressure from US to go for this pipeline as blocks Russias hold on energy supplies.

and Russia opposes this

Uneconomic because there are some doubts concerning viability of supplies. As of

January 2010 only Azerbaijan is a confirmed supplier. The main supplier is expected

to be Iraq with potential supplies from Azerbaijan, Turkmenistan, and Egypt

Concerns have been raised about the safety of the project. The pipeline will cross

through unstable area of Turkey's South East region.

The project is backed by several European Union states and the United States and is seen as

rival to the Gazprom-Eni South Stream pipeline project. The project is developed by the

consortium of six companies. If built, the pipeline is expected to be operational by 2017 and

it will carry 31 billion cubic metres (1.1 trillion cubic feet) of natural gas per year.
http://en.wikipedia.org/wiki/Natural_gashttp://en.wikipedia.org/wiki/Natural_gashttp://en.wikipedia.org/wiki/Pipeline_transporthttp://en.wikipedia.org/wiki/Erzurumhttp://en.wikipedia.org/wiki/Turkeyhttp://en.wikipedia.org/wiki/Baumgarten_an_der_Marchhttp://en.wikipedia.org/wiki/Baumgarten_an_der_Marchhttp://en.wikipedia.org/wiki/Austriahttp://en.wikipedia.org/wiki/Natural_gashttp://en.wikipedia.org/wiki/Russia_in_the_European_energy_sectorhttp://en.wikipedia.org/wiki/European_Unionhttp://en.wikipedia.org/wiki/South_Streamhttp://en.wikipedia.org/wiki/Iraqhttp://en.wikipedia.org/wiki/Azerbaijanhttp://en.wikipedia.org/wiki/Turkmenistanhttp://en.wikipedia.org/wiki/Egypthttp://en.wikipedia.org/wiki/European_Unionhttp://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/Gazpromhttp://en.wikipedia.org/wiki/Enihttp://en.wikipedia.org/wiki/South_Streamhttp://en.wikipedia.org/wiki/South_Streamhttp://en.wikipedia.org/wiki/Enihttp://en.wikipedia.org/wiki/Gazpromhttp://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/European_Unionhttp://en.wikipedia.org/wiki/Egypthttp://en.wikipedia.org/wiki/Turkmenistanhttp://en.wikipedia.org/wiki/Azerbaijanhttp://en.wikipedia.org/wiki/Iraqhttp://en.wikipedia.org/wiki/South_Streamhttp://en.wikipedia.org/wiki/European_Unionhttp://en.wikipedia.org/wiki/Russia_in_the_European_energy_sectorhttp://en.wikipedia.org/wiki/Natural_gashttp://en.wikipedia.org/wiki/Austriahttp://en.wikipedia.org/wiki/Baumgarten_an_der_Marchhttp://en.wikipedia.org/wiki/Baumgarten_an_der_Marchhttp://en.wikipedia.org/wiki/Turkeyhttp://en.wikipedia.org/wiki/Erzurumhttp://en.wikipedia.org/wiki/Pipeline_transporthttp://en.wikipedia.org/wiki/Natural_gashttp://en.wikipedia.org/wiki/Natural_gas


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As of 2012, some analysts declare Nabucco is unlikely to be built due to changed political

situation and competing projects. The deputy chairman of the Russia's State Duma Energy

Committee Ivan Grachev has questioned the viability of the Nabucco project and sees it as an

attempt to put pressure on Russia.[91] This is supported by the Russia's gas deals with

Azerbaijan and Turkmenistan, which by some observers has been seen as attempt to reserve

potential Nabucco supplies.[92][93]Azerbaijan has stated that the gas will be transported only

through those routes, which would be commercially most attractive.[85] Also the opening of

the Central AsiaChina gas pipeline and the agreements to build the South Stream pipeline

has been seen as the end of Nabucco project.

South Stream and Nabucco: Head to HeadAs discussed above Nabucco is a proposed pipeline from Central Asia to Europe via Turkey.

The plan is backed by EU & US. On the other hand, South Stream is a proposed pipeline

from Central Asia to Europe via Russia. Construction of Nabucco will obviously decrease

Russian influence over the area. This is the reason for strong US support towards

construction of Nabucco.

The supply to Nabucco will be from Ajerbaijan and supply to south stream will be from

Turkmenistan. So, the biggest obstacle in front of Nabucco is that Ajerbaijan doesnt have

enough gas reserves to satisfy the European demand. The solution to his problem can be the

construction of TCGP (Trans Caspian Gas Pipeline).
http://en.wikipedia.org/wiki/State_Dumahttp://en.wikipedia.org/wiki/Nabucco_pipeline#cite_note-90http://en.wikipedia.org/wiki/Nabucco_pipeline#cite_note-Azerbaijan-Russia_Gas_Agreement-91http://en.wikipedia.org/wiki/Nabucco_pipeline#cite_note-trend150110-84http://en.wikipedia.org/wiki/Central_Asia_%E2%80%93_China_gas_pipelinehttp://en.wikipedia.org/wiki/Central_Asia_%E2%80%93_China_gas_pipelinehttp://en.wikipedia.org/wiki/Central_Asia_%E2%80%93_China_gas_pipelinehttp://en.wikipedia.org/wiki/Central_Asia_%E2%80%93_China_gas_pipelinehttp://en.wikipedia.org/wiki/Nabucco_pipeline#cite_note-trend150110-84http://en.wikipedia.org/wiki/Nabucco_pipeline#cite_note-Azerbaijan-Russia_Gas_Agreement-91http://en.wikipedia.org/wiki/Nabucco_pipeline#cite_note-Azerbaijan-Russia_Gas_Agreement-91http://en.wikipedia.org/wiki/Nabucco_pipeline#cite_note-90http://en.wikipedia.org/wiki/State_Duma


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Trans Caspian Gas Pipeline

TCGP is a proposed pipeline between Ajerbaijan and Turkmenistan. This pipeline will

provide Ajerbaijan a direct access to Turkmenistans gas reserves. The pipeline will feed the

Nabucco pipeline. So, Russia will be on the losing side. Thats why Russia has brought a

controversy in this issue. According to them Caspian sea is a lake which means all thesurrounding countries have equal right on the Caspian sea. According to them if Ajerbaijan

and Turkmenistan want to construct TCGP, they have to permission from other surrounding

countries i.e. Russia, Kazakhstan and Iran. And Russia obviously is not giving permission, as

they dont want to lose their hold in this area. China is also opposing this pipeline as it

doesnt want Turkmeni gas to go to Europe.

Changing games in Central Asia

From long time, we have seen that Central Asian states were under Russian control. But now

these states have realized their importance. They have realized that the big players like EU,

US and China are scrambling to buy their energy supplies. Moreover there are problems

going on in between Russian and Turkmen govt. The two governments had a contract

according to which Russia will be buying a given amount of gas from the Turkmen govt. Butbecause of recessionary periods in Russia, it was taking less amount of gas. This even led to

an explosion in the pipelines as Turkmenistan was still pumping gas into the pipeline. After

this explosion Turkmen govt. took a rigid stand against Russia and it promised to buy the full

gas supplies. But still Russia was only taking one third of the supplies. Moreover Russia was

reselling the gas to Europian markets at U.S.$250 per barrel after buying it for only $50. So,

the Turkmen govt. was very angry. They raised their price to the level of European prices.

Because of this Gazprom was not making much profit. On the other hand China started

investing heavily in Turkmenistan and Kazakhstan which ultimately lead to the formation of


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pipelines from Kazakhstan and Turkmenistan to China.

Nord Stream, TAP and TGINord Stream is a very strategically important pipeline for Russia. It helps in solving two purpose:

firstly the pipeline will bypass Ukraine and secondly the pipeline will bypass the Baltic states. Russia

saved a lot on the transit costs and it doesnt need to bargain with Ukr aine and Baltic states. Russia

never had good relation with Baltic states and relations with Ukraine are continuously bad after the

Trans Siberian controversies.

Turkey Greece Italy pipeline (proposed) is also very important as reduces Russias influence in the

region. The pipeline will also be connected with Nabucco. The pipeline brings forward the

importance of Turkey in the region. TAP is a slight alteration to TGI pipeline. This pipeline will pass

through Albania and it will be the shortest route combining Italy to the Central Asian reserves.


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Blue Stream

Blue Stream is a major trans-Black Sea gas pipeline that carries natural

gas from Russia into Turkey. The pipeline has been constructed by the Blue Stream Pipeline

B.V., the Netherlands based joint venture ofRussian Gazprom and Italian Eni. The Blue

Stream Pipeline B.V. is an owner of the subsea section of pipeline,

including Beregovaya compressor station, while Gazprom owns and operates the Russianland section of the pipeline and the Turkish land section is owned and operated by the

Turkish energy companyBOTA. According to Gazprom the pipeline was built with the

intent of diversifying Russian gas delivery routes to Turkey and avoiding third countries.

Building the Blue Stream pipeline was intended to be the foundation for a strategic

partnership between Russia and Turkey, with joint participation in energy and transport

projects. The existing gas transit route to Turkey went through Ukraine, Moldova, Romania,

and Bulgaria. This land route made the gas substantially more expensive, and there werecontinual accusations of gas being illicitly siphoned off while being transported through

Ukraine and Moldova.[citation needed] Russia considered that these problems could be

solved by building a pipeline across the Black Sea floor.

One of the political goals of the Blue Stream project was to block the path of rival countries

aiming to use the territory of Turkey to bring gas from the Caspian area to Europe. In

November 1999, the presidents ofTurkmenistan, Turkey, Azerbaijan, and Georgia signed a

four-party inter-governmental agreement on building a rival Trans-Caspian gas pipeline.
http://en.wikipedia.org/wiki/Black_Seahttp://en.wikipedia.org/wiki/Pipeline_transporthttp://en.wikipedia.org/wiki/Natural_gashttp://en.wikipedia.org/wiki/Natural_gashttp://en.wikipedia.org/wiki/Russiahttp://en.wikipedia.org/wiki/Turkeyhttp://en.wikipedia.org/wiki/Netherlandshttp://en.wikipedia.org/wiki/Russiahttp://en.wikipedia.org/wiki/Gazpromhttp://en.wikipedia.org/wiki/Italyhttp://en.wikipedia.org/wiki/Enihttp://en.wikipedia.org/wiki/Beregovayahttp://en.wikipedia.org/wiki/BOTA%C5%9Ehttp://en.wikipedia.org/wiki/BOTA%C5%9Ehttp://en.wikipedia.org/wiki/BOTA%C5%9Ehttp://en.wikipedia.org/wiki/Gazpromhttp://en.wikipedia.org/wiki/Ukrainehttp://en.wikipedia.org/wiki/Moldovahttp://en.wikipedia.org/wiki/Romaniahttp://en.wikipedia.org/wiki/Bulgariahttp://en.wikipedia.org/wiki/Wikipedia:Citation_neededhttp://en.wikipedia.org/wiki/Caspian_Seahttp://en.wikipedia.org/wiki/Europehttp://en.wikipedia.org/wiki/Turkmenistanhttp://en.wikipedia.org/wiki/Turkeyhttp://en.wikipedia.org/wiki/Azerbaijanhttp://en.wikipedia.org/wiki/Georgia_(country)http://en.wikipedia.org/wiki/Trans-Caspian_Gas_Pipelinehttp://en.wikipedia.org/wiki/Trans-Caspian_Gas_Pipelinehttp://en.wikipedia.org/wiki/Georgia_(country)http://en.wikipedia.org/wiki/Azerbaijanhttp://en.wikipedia.org/wiki/Turkeyhttp://en.wikipedia.org/wiki/Turkmenistanhttp://en.wikipedia.org/wiki/Europehttp://en.wikipedia.org/wiki/Caspian_Seahttp://en.wikipedia.org/wiki/Wikipedia:Citation_neededhttp://en.wikipedia.org/wiki/Bulgariahttp://en.wikipedia.org/wiki/Romaniahttp://en.wikipedia.org/wiki/Moldovahttp://en.wikipedia.org/wiki/Ukrainehttp://en.wikipedia.org/wiki/Gazpromhttp://en.wikipedia.org/wiki/BOTA%C5%9Ehttp://en.wikipedia.org/wiki/Beregovayahttp://en.wikipedia.org/wiki/Enihttp://en.wikipedia.org/wiki/Italyhttp://en.wikipedia.org/wiki/Gazpromhttp://en.wikipedia.org/wiki/Russiahttp://en.wikipedia.org/wiki/Netherlandshttp://en.wikipedia.org/wiki/Turkeyhttp://en.wikipedia.org/wiki/Russiahttp://en.wikipedia.org/wiki/Natural_gashttp://en.wikipedia.org/wiki/Natural_gashttp://en.wikipedia.org/wiki/Pipeline_transporthttp://en.wikipedia.org/wiki/Black_Sea


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Russians are interested in this pipeline because they want to leverage on the divide between

the USA and Pakistan. They want to use this pipeline construction to reduce the influence of

USA and increase their influence in this region.

The Chinese are interested in the construction of these pipelines because of the heavy

investments that they have made in Iran. The successful construction and operation of this

pipeline will increase their returns, enhance their influence over Iran and on a later date, this

pipeline can also be extended to China through India.

As far as India is concerned, it will help enhance relationships with Iran which needs allies in

the international arena. This pipeline also will be able to supply more gas than TAPI pipeline,

better satisfying the growing energy needs of India.

The IPI has certain disadvantages also. It is costlier than the TAPI pipeline and it will again

have to pass though the troubled South Central Asian region and the Pakistan factor is there.

The Oman-India PipelineThis is an ambitious project involving Oman, India, Turkmenistan and Iran. The pipeline is

supposed to be constructed between India and Oman through the sea bed in the Arabian Sea.

The gas will be sourced from Turkmenistan and Iran to Oman and then will be re-routed to

India through this pipeline.


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The length of this pipeline is 2000 KM and the cost of building this is estimated in between

$4 to $6 Billion US. It will have the capacity to supply 31.1 billion cubic meters of Natural

Gas to India daily.

This pipeline will be able to enhance Indias relationship with all the three countries and will

give access to both Iranian and Turkmen gas. It also will have the capacity to satisfy Indias

growing needs. Currently India imports around 26 million cubic meters of natural gas every

day.

This pipeline also by passes the troubled South Central Asian region and problems associated

with it. The problem with this pipeline is that deep sea construction and maintenance are very

costly and require hi tech technologies. Also there is a security concern as these pipelines will

be constructed in international waters and no one will be responsible for its protection.

Also, the most immediate problem is that the negotiations with Turkmenistan are still going

on.


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Role of Turkey

The recent visit of US President Obama to Turkey was far more significant than the

Presidents speech would suggest. For Washington Turkey today has become a geopoliticalpivot state which is in the position to tilt the Eurasian power equation towards Washington

or significantly away from it depending on how Turkey develops its ties with Moscow and its

role regarding key energy pipelines.

If Ankara decides to collaborate more closely with Russia, Georgia's position is precarious

and Azerbaijan's natural gas pipeline route to Europe, the so-called Nabucco Pipeline, is

blocked. If it cooperates with the United States and manages to reach a stable treaty

with Armenia under US auspices, the Russian position in the Caucasus is weakened and an

alternative route for natural gas to Europe opens up, decreasing Russian leverage

against Europe.

For Washington the key to bringing Germany into closer cooperation with the US is to

weaken German dependence on Russian energy flows. Twice in the past three winters

Washington has covertly incited its hand-picked President in Ukraine, Viktor Yushchenko to

arrange an arbitrary cut off of Russian gas flows to Germany and other EU destinations. The

only purpose of the actions was to convince EU governments that Russia was not a reliable

energy partner. Now, with the Obama visit to Ankara, Washington is attempting to win

Turkish support for its troubled Nabucco alternative gas pipeline

through Turkey from Azerbaijan which would theoretically at least lessen EU dependence on

Russian gas.

The Turkish-EU problem

However willing Turkish Prime Minister Erdogan might be to accommodate Obama, the

question of Turkish relations with the EU is inextricably linked with the troublesome issue of

Turkish membership to the EU, a move vehemently opposed by France and also less openly

by Germany.

Turkey is one of the only routes energy from new sources can cross to Europe from

the Middle East, Central Asia or the Caucasus. If Turkeywhich has considerable influence

in the Caucasus, Central Asia, Ukraine, the Middle East and the Balkans is prepared to

ally with the United States, Russia is on the defensive and German ties to Russia weaken


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considerably. If Turkey decides to cooperate with Russia instead, Russia retains the initiative

and Germany is dependent on Russian energy. Since it became clear in Moscow that US

strategy was to extend NATO to Russias front door via Ukraine and Georgia, Russia has

moved to use its economic carrot its vast natural gas resources, to a t the very least

neutralize Western Europe, especially Germany, towards Russia. It is notable in that regard

that the man chosen as Russias President in December 1999 had spent a significant part of

his KGB career in Germany.


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References

http://www.airpower.au.af.mil/airchronicles/apj/apj10/spr10/frickenstein.html

http://www.cacianalyst.org/?q=node/4879

http://www.brookings.edu/speeches/2002/0815russia_hill.aspx Central Asia National Interests and Regional Prospects-Johannes F. Linn

(China and Eurasia Forum Quarterly, Volume 5, No. 3 (2007) Central Asia-

Caucasus Institute & Silk Road Studies Program ISSN: 1653-4212)

Russia and Central Asia From Disinterest to Eager Leadership By Jos Boonstra

(Senior Researcher, FRIDE, Madrid and Co-chair)

http://en.wikipedia.org/wiki/Urengoy%E2%80%93Pomary%E2%80%93Uzhgorod_pi

peline

http://en.wikipedia.org/wiki/Russia%E2%80%93Ukraine_gas_disputes

http://en.wikipedia.org/wiki/Mikhail_Khodorkovsky

http://www.globalresearch.ca/index.php?context=va&aid=13171
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