Page 2 of 3 Gas: Iran turns up the
heat By M K Bhadrakumar
Asian
neighbors (and China) and its proposal to Russia
to develop a cooperative grid of gas-producing
countries are, in strategic terms, two sides of
the same coin.
Clearly, Tehran has sized
up the growing assertiveness in Russian regional
policies and is keen to harness it geopolitically.
But more important, Tehran has signaled to
European capitals that they may have to pay a
heavy price for any further identification with
the US policy toward Iran. The fact that the
Iranian proposal on the "gas
OPEC" was made by spiritual leader Khamenei should
leave Western capitals in no doubt that Tehran is
not scoring a propaganda point. They must now
rethink before imposing unilateral sanctions on
Iran.
Iran is the "last frontier" for
European countries seeking to access natural gas
from the Middle East. By 2015-20, Europe will face
serious gas shortages, even if Russia augments its
supplies via the Northern European pipeline.
Tehran knows it is a "special case" for European
countries. Tehran was hoping all along that it
could normalize relations with the European Union,
and that it would receive serious economic and
political carte blanche.
Khamenei's
warning has registered. In an interview with The
Financial Times, French Prime Minister Dominique
de Villepin said on Tuesday that the international
community (read the United States) is "lacking
imagination" on Iran. "We must show Iran that
firstly it has more to lose than gain from an
enrichment program that worries the international
community, but also that if Iran accepts to
respect its international obligations, it has much
more to gain than lose," he argued.
German
Chancellor Angela Merkel said, "Talks on the
matter are still possible." A meeting between
Merkel and Iran's chief nuclear negotiator, Ali
Larijani, on the sidelines of a Munich security
conference this weekend is probable in an attempt
to break the impasse over the nuclear issue.
Germany holds the EU presidency and heads the
Group of Eight.
Russian motivations
Meanwhile, for Moscow, Khamenei's
suggestion on a "gas OPEC" is a geopolitical
windfall. Between them, Russia and Iran control
more than 40% of the world's natural-gas reserves.
And about three-fourths of the world's gas
reserves are concentrated in the Middle East and
the former Soviet Union. Therefore,
Russian-Iranian cooperation has great potential to
impact on the global distribution and price of
gas.
First and foremost, Moscow stands to
gain by forging an understanding with Tehran on
gas-export strategies to avoid competing in the
European market. Russia has to prepare for the day
when Iran's huge gas reserves (26.9 trillion cubic
meters) will begin to flow toward the European
market.
Russia has already worked out a
level of understanding with Algeria. Algeria meets
10% of Europe's current needs as compared with
Russia's 30%, but its market lies in southern
Europe. Next week, Putin visits Qatar, another
major gas-producing country in the Middle East.
Qatar controls the world's third-largest gas
reserves after Russia and Iran, estimated to be in
the region of 11.2 trillion cubic meters.
Second, Iran is an important partner for
Russia in terms of the politics of the transit of
gas exports. Iran is averse to any country
reselling its gas. Therefore, Iran's choice of
transit routes to Europe will have a profound
bearing on the geopolitics of South Caucasus, the
Black Sea and even South and Central Asia. An
extension of the Iran-Armenia gas pipeline
(expected to be commissioned shortly) through
Georgia via the bottom of the Black Sea could
further exclude Russian gas from the South
Caucasus and southeastern European markets.
Putin recently criticized Bulgaria and
Greece for procrastinating over the
Burgas-Alexandropoulis pipeline project. He said:
"Since we and our partners in the Caspian Sea
region are partners, while our main consumers are
in Western Europe, and Bulgaria and Greece are
members of the European Union, they should be very
much interested in the execution of this project.
But, instead, we are seeing endless bother."
Russian Deputy Prime Minister Dmitry
Medvedev was more forthright last week in Davos,
Switzerland, when he alleged that US Secretary of
State Condoleezza Rice had shot down
Burgas-Alexandropoulis. Rice has made clear
Washington's preference for the rival EU-backed
Nabucco pipeline for evacuating Caspian gas via
Turkey to southern Europe. Switzerland and Austria
recently reached an understanding with Iran about
the supply of Iranian gas for the Nabucco pipeline
via the existing Iran-Turkey gas pipeline.
Again, the EU has stepped up the search
for alternative projects, such as the
Trans-Caspian pipeline, and has identified Central
Asian countries as a source of supply for the
European market. Iran is well placed to offer
direct pipeline routes to Turkmenistan and
Uzbekistan. That is to say, Iran is a key partner
in any EU strategy to develop direct
transportation links with Central Asian energy
producers that bypass Russian pipelines.
Washington has sought for the EU to press
Russia to deregulate its monopoly of
gas-transportation networks and to allow Central
Asian gas to have access to it on conditions of
simple transit. Washington is pressuring European
countries not to enter long-term gas contracts
with Russia. Cooperation with Iran helps Russia
immensely in countering these Western pressures.
The SCO 'energy club' Besides,
Russia always wanted to take part in gas projects
in Iran and Qatar, especially in the Southern Pars
fields. (Two-thirds of the South Pars reservoir
belong to Qatar.) The latest developments in
Russian-Iranian relations and Putin's forthcoming
visit to Qatar may lead to joint gas projects
between Iran and Gazprom.
Furthermore,
gaining leverage over gas distribution in Eurasia
has always remained a strategic goal for Gazprom.
Any merging of Russian and Iranian gas
distribution networks virtually paves the
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