Yusufov fights to keep bid for DEPA
alive By Robert M Cutler
MONTREAL - An investment vehicle created
by a former Russian energy minister and Gazprom
director has appealed against its exclusion from
bidding for the Greek public gas utility DEPA.
Igor Yusufov's Fund Energy has been suspected of
being Gazprom's "Plan B" in the stakes for DEPA,
which is being privatized as a result of the
crisis in Greek government finances. Yusufov is
"part of Russian Prime Minister Vladimir Putin's
inner circle, and has already been active in
Cyprus", according to the Athens newspaper
Kathimerini.
Gazprom's interest in DEPA
stems from the Greek utility's participation in
the Interconnector Greece-Italy (IGI) project, a
planned natural gas pipeline that has lost out
against the Trans-Adriatic Pipeline (TAP) in the
competition for candidacy for the
"western route" for
Azerbaijan's offshore Shah Deniz gas to Europe.
That interest is present because of
Gazprom's projected South Stream pipeline foresees
one of its two branches eventually crossing Greece
into Italy to penetrate the Southern European
market.
South Stream's two branches, one
into Southeastern Europe (via the Black Sea to
Bulgaria through the Balkans to Austria) and the
other into Southern Europe (via Greece and Italy),
are supposed to transport up to 63 billion cubic
meters per year (bcm/y) of natural gas from
Russia. Putin has accelerated the first
pipe-laying to December 2012 in order to seek to
circumvent the application of new EU anti-trust
rules, scheduled to enter into force in March next
year, to the project and to Gazprom's
participation in it.
The Shah Deniz
consortium, for its part, is now deliberating over
the candidate for the "northern route" from Turkey
into Southeastern Europe. Once this is decided, it
will make the final choice between the western
route (ie, TAP) and the northern route's
candidate.
The IGI was planned to carry 10
billion cubic meters per year (bcm/y) or natural
gas for 810 kilometers, including the
220-kilometer "Poseidon" pipeline from Igoumenitsa
in Greece to Otranto in Italy underneath the
Ionian Sea. The TAP project on the other hand is
42.5% owned by the Norwegian firm Statoil, which
also holds 25.5% of the Shah Deniz consortium, and
while planned for 10 bcm/y in the first instance
is also to be designed for later doubling of
capacity to 20 bcm/y.
Meanwhile the South
Stream principal is seeking to confuse the issue
in Southeastern and Central Europe by announcing
one day that the first section will be laid in
Bulgaria before the end of the year, then several
days later that the first section will be laid in
Serbia, and then several days after that, that it
will be laid in Austria.
The South Stream
pipeline is an exclusively political project that
will never find a sound commercial basis nor
return its capital investment, Mikhail Krutikhin,
an independent energy analyst of RusEnergy told
Moscow newspaper Nezavisimaya gazeta. He estimates
that the total cost of South Stream's construction
could reach US$40 billion.
That was the
case with the Blue Stream pipeline, constructed
under the Black Sea also by Gazprom in cooperation
with the Italian company Eni, at the end of the
1990s. The goal of Blue Stream, which has never
reached full-capacity transmission and has not
returned its economic investment, was to prevent
construction of the Trans-Caspian Gas Pipeline
(TCGP) project then being promoted by US-based
companies GE Capital and Bechtel (later with the
participation of Royal Dutch Shell).
The
South Stream project began over the course of the
last decade as a similar maneuver against the
Nabucco pipeline project, the original 31 bcm/y
volume of which was predicated upon availability
of natural gas from Turkmenistan that would arrive
by way of a reinvigorated, now European-sponsored
TCGP.
Important progress towards the new
EU-backed TCGP continues to be made, and the head
of Azerbaijani state company SOCAR recently
announced in Baku that Turkmenistan has agreed in
principle to make at least 10 bcm/y available to
Europe through such a means, pending conclusion of
appropriate political and industrial contractual
guarantees.
With the Azerbaijani-Turkish
agreement to construct a Trans-Anatolian Gas
Pipeline (TAGP, also called TANAP after its
initials in Turkish), Nabucco has now been reduced
to a "Nabucco West" project concentrated in
Southeastern and East Central Europe, where it is
competing with a BP-sponsored South East European
Pipeline (SEEP) for Shah Deniz's "northern route"
designation.
South Stream is driven on the
one hand by Putin's obsession with circumventing
Ukraine for Russian gas to Europe. Its
construction would complete a pipeline pincer
movement on Central Europe, of which the already
operating North Stream, terminating in Germany
from Russia under the Baltic Sea, is the other
prong. The figurative target of the two prongs
would be the Baumgarten distribution hub in
Austria, but the EU has thrown out Gazprom's
attempt to purchase half the hub's assets already
on antitrust grounds.
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.
(Copyright 2012 Asia Times Online
(Holdings) Ltd. All rights reserved. Please
contact us about sales, syndication and
republishing.)
Head
Office: Unit B, 16/F, Li Dong Building, No. 9 Li Yuen Street East,
Central, Hong Kong Thailand Bureau:
11/13 Petchkasem Road, Hua Hin, Prachuab Kirikhan, Thailand 77110
