Page 2 of 2 Nabucco: The fat lady has
sung By John Helmer
increase in production by 2015 to
36bcm, with export volume of 25bcm.
Most
Kazakh gas exports currently go to Russia, where
they are processed at a Gazprom plant in
Astrakhan, on Russia's Caspian shore. Gazprom is
expanding capacity at the plant to accommodate an
increase of Kazakh shipments to 15bcm
annually.
Another
pipeline route, which Russia has favored in the
past, would cater to the growth of these output
and export volumes, but run along the Caspian
shore on Russian territory. The tradeoff for
Gazprom and the Kremlin is that if they want to
avoid competition from their neighbors for
deliveries of gas to the European market, they
will have to pay much more than they do now,
committing to heavy investment in infrastructure
around the Caspian shore.
That now appears
to be what the three presidents have decided. In
one document they signed, they have agreed to
increase the capacity of the existing but
underused pipeline, to the level Putin referred to
in the press conference. Eventual capacity for
this pipeline could be as high as 80bcm.
A
second document signed by the three presidents
contemplates a second, new gas pipeline with
initial capacity of 10bcm. This should be
operational by 2009. Together, there will be
export capacity of 90bcm. It doesn't take a head
against a wall to calculate that this will be more
than the 86bcm in additional export gas, which
Turkmenistan and Kazakhstan are targeting over the
next decade. That should be the finale of Nabucco
- unless Putin has a fresh song for the Austrians
in Vienna next week.
Meanwhile, in a
chorus of the unliberated - that is to say, those
who starve for lack of oil and gas - Polish
President Lech Kaczynski met over the weekend in
Krakow with his counterparts from Lithuania,
Ukraine, Georgia and Azerbaijan. They said they
want to discuss ways of lessening Russian
dominance in oil and gas supplies, and declared
their get-together a success.
All that was
missing was the oil and gas, as Kazakh President
Nazarbayev refused to attend, meeting with Putin
instead. The Polish pipe dream is to reverse the
direction of the pipeline currently running
between Brody and Odessa in Ukraine, and extend it
to Gdansk, the Polish port on the Baltic, with
cargoes of crude from Kazakhstan.
This,
too, has been a US-backed project; but the nearest
US oil producer, Chevron, has been unable to find
a commercially viable reason for supplying the oil
it is lifting from its Tenghiz field on the Kazakh
shore of the Caspian. Chevron pipes this oil
across Russia to Novorossiysk port, on the Black
Sea. The Russian pipeline company Transneft, which
controls a 24% stake in this pipeline, is making
sure Chevron cannot increase its crude-oil volumes
to compete at Novorossiysk with Russian shipments.
The Poles - who have suffered for 400
years, since the Polish pretender Dmitry the False
failed to hold on to the Kremlin in 1612 - must
face the dwindling of discount-priced crude-oil
supply traditionally piped from Russia through
Belarus. Lithuania has had most of the Russian
crude on which its refinery depends cut off since
last year.
If it is energy freedom they
want, both countries could pay full market price,
and import by tanker. This is a freedom local
politicians and newspapers do much to advocate,
but few voters are prepared to pay for.
Ukrainian politicians are split on their
pipeline project, and for the next two years at
least, the pipeline runs southward, carrying
Russian crude for loading on board tankers that
must compete for space in the Bosporus strait -
against tankers from Novorossiysk, also carrying
Russian oil to market.
The Turks keep
devising new pipeline plans for increasing the
utilization of the US-backed oil pipeline from
Baku, Azerbaijan, to Ceyhan, Turkey's Aegean Sea
outlet. But Ankara doesn't concede its reason -
this newly operational pipeline is operating well
below capacity, and possibly at or below
profitability. The energy shorts are discovering
that Washington, which promotes oil and gas
pipelines for political and strategic reasons,
isn't prepared to subsidize the losses.
Two days after the tripartite pipeline
agreement was signed by Putin, Nazarbayev and
Berdymukhamedov, US Energy Secretary Samuel Bodman
declared at a meeting of European officials in
Paris: "That would not be good for Europe. It
would fly in the face of what is needed, which is
the diversity of suppliers."
"Va,
pensiero, sull'ale dorate" - "fly, thought, on
wings of gold" - that's the most famous song in
Nabucco the opera. It's also the best the
Bush administration can do to promote freedom of
gas and oil deliveries - without paying for it.
Note 1. One suggestion is
that the pipeline recalls the greatness of the
Babylonian King Nebuchadnezzar II, who reigned
from about 605-562 BC. Nabucco is short for
Nabucodonosor, the Italian name for
Nebuchadnezzar.
John Helmer is
the longest-serving foreign correspondent in
Russia.
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