MONTREAL - The European Union (EU) and Turkey have resolved
two major differences that were preventing agreement on the terms for the
Nabucco natural gas pipeline, and the Turkish President Abdullah Gul is
reported to have promised that a signing ceremony will take place on June 25 in
Ankara.
Principals behind the Nabucco project, on the drawing-boards for years, intend
to build the 3,300-kilometer pipeline from the eastern border of Turkey through
the Balkans to the Baumgarten gas hub in Austria, where national energy company
OMV leads the Nabucco Gas Pipeline International consortium. Other members of
the consortium are Botas (Turkey), Bulgargaz
(Bulgaria), Transgaz (Romania), MOL (Hungary), and RWE (Germany).
The two problems that were solved in Prague last week involved pricing and the
legal regime for Turkish consumption of gas flowing through the pipeline. The
EU had insisted that Turkey pay the equivalent of European prices; Turkey had
proposed a figure 15% less than that. The common-sense resolution that was
adopted provides for Turkey's price to be based on the cost of transportation:
the gas consumed in Turkey will hardly go all the way to Baumgarten, so it will
cost less. As for the legal regime, the EU has abandoned its insistence that
the norms of its acquis communautaire apply in Turkey, a non-member of
the European body, and a middle ground within Turkish law has been found.
While part of the breakthrough is due to the EU dropping of unrealistic
demands, the electoral defeat of the AKP of Prime Minister Recep Tayyip Erdogan
in recent municipal elections appears to have played a role in facilitating the
agreement. (See Turkish
magic, Asia Times Online, April 16, 2009.) That is because subsequent
cabinet changes brought new people with more practical experience, pragmatism
and realism directly into decision-making roles.
In particular, the professional background of new Energy Minister Taner Yildiz
is as an electrical engineer with experience in the electricity production and
distribution industries. Turkey has been increasing its natural gas demand by
between 6% and 8% for much of the current decade, and that gas goes mostly
directly into the electricity industry. The number of cities on the natural gas
distribution grid has increased from nine in 2002 to 63 last year.
New Foreign Minister Ahmet Davutoglu also played a significant role. Formerly
chief foreign policy advisor to the prime minister, his background is that of
an academic international relations expert. He has been a main architect of the
AKP regime's foreign policy, to such a degree that his influence in
contemporary Turkey is compared with the influence of Henry Kissinger on US
foreign policy in the 1970s.
Davutoglu has
crafted the country's controversial openings to the Middle East, including to
Hamas, and also the Israel-Syria negotiations, as well as talks concerning
relations with the Kurdish region in northern Iraq, all while declaring the EU
and the North Atlantic Treaty Organization to be "the most important pillars of
the policy of setting a balance between security and freedom". His brief is now
not only to help to formulate foreign policy but also to execute it.
There are still two or three more rounds of negotiations to be conducted before
the expected June 25 signing. On May 13, Erdogan visited Baku to discuss
natural gas pricing with Azerbaijani officials and to assure them that, despite
some thawing in relations between Turkey and Armenia, the long-standing Turkish
blockade of Armenia will not be lifted until the situation in the contested
region of Nagorno-Karabagh is resolved to Azerbaijan's satisfaction. It is
consequently necessary that the US continues its attempts for a breakthrough on
the Karabagh issue.
The Nabucco project would in the first instance take gas from the further
development of Azerbaijan's offshore Shah-Deniz project, which has so far been
delayed even though it is piping some gas through the Baku-Tbilisi-Erzerum line
(BTE, also called the South Caucasus Pipeline, or SCP). In Prague for the first
time, EU officials spoke to the press about the possibility of an undersea
pipeline from Turkmenistan to Azerbaijan (see
Another trans-Caspian pipe dream, Asia Times Online, February 28, 2008,
and New chance
for Trans-Caspian pipeline , Asia Times Online, October 24, 2008).
The Turkmenistan government sent an observer delegation to Prague. At a
minimum, Ashgabat will use Nabucco as a bargaining chip with Moscow, but OMV,
the Nabucco principal, along with Germany's RWE established a joint venture
several months ago for energy relations with Turkmenistan and are already
working on confidence-building through such projects as ameliorating
electricity production and distribution in the country.
On May 16, Erdogan is visiting Sochi in southern Russia for talks with Russia's
Prime Minister Vladimir Putin. However, Erdogan's new foreign minister,
Davutoglu, seems to be charting a course away from ideas of an all-encompassing
Turkish-Russian energy condominium in the region, which had led to the
construction under the Black Sea of the Blue Stream pipeline between the two
countries as a blocking move by Moscow against prospects a decade ago for a
Trans-Caspian Gas Pipeline from Turkmenistan.
This can only be constructive, as Azerbaijan's experience over the last 20
years demonstrates the benefits to the national economy as well as sovereignty,
of having a multiple-pipeline policy. It is perhaps this lesson that
Turkmenistan's President Gurbanguly Berdimuhammedow is now appreciating.
Dr Robert M Cutler (http://www.robertcutler.org), educated at the
Massachusetts Institute of Technology and The University of Michigan, has
researched and taught at universities in the United States, Canada, France,
Switzerland, and Russia. Now senior research fellow in the Institute of
European, Russian and Eurasian Studies, Carleton University, Canada, he also
consults privately in a variety of fields.
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