Energy Geopolitics
Radu Dudău, Dr. Phil. Romania
Eurasian Energy Security: Recent Trends in the European Game of Natural Gas Projects
Abstract The paper discusses the development prospects of the major gas pipeline projects planned to link Europe to the Caspian region (Nabucco and South Stream), on the one hand, and to northwestern Siberia and the Barents Sea (Nord Stream), on the other hand. The analysis indicates the following: the construction work of Nord Stream‟s first phase will likely start in the late spring of 2010, though the project has no developed supply field for its second phase; Nabucco‟s fate is still uncertain, in spite of some recent political progress; and the South Stream project is a mere “paper tiger,” working mainly to undermine Nabucco. Besides, it is argued that the opening of the Central Asia-China pipeline, which gives Turkmenistan a major export outlet other than Russia, is a true “game changer,” and that along with the development of new LNG infrastructure, the promising results of “unconventional gas” developments in Hungary show that Europe‟s security of supply is not exhausted by the pipelines game. Keywords: Energy security, Southern Corridor, Nabucco, South Stream, Nord Stream, White Stream
1. Introduction: The EU-Russia energy interdependence
The EU currently imports more than 40% of its natural gas from Russia, a figure which is expected to rise to 60% by 2030. The level of dependence is
1
considerably higher for a number of European states which rely on Russian imports for virtually their entire gas needs.1 The situation did become a public concern during the Russo-Ukrainian “gas war” of January 2009, which left parts of South-East Europe in the cold for two weeks in the middle of the winter. Gazprom, the monopolist exporter owned 51% by the Russian state, which produces around 19.4% of the world’s total output of natural gas, sells two thirds of its gas to the EU countries. In 2006, for instance, Gazprom’s gas sales to Europe
Eurasian Energy Security: Recent Trends in the European Game of Natural Gas Projects
Abstract The paper discusses the development prospects of the major gas pipeline projects planned to link Europe to the Caspian region (Nabucco and South Stream), on the one hand, and to northwestern Siberia and the Barents Sea (Nord Stream), on the other hand. The analysis indicates the following: the construction work of Nord Stream‟s first phase will likely start in the late spring of 2010, though the project has no developed supply field for its second phase; Nabucco‟s fate is still uncertain, in spite of some recent political progress; and the South Stream project is a mere “paper tiger,” working mainly to undermine Nabucco. Besides, it is argued that the opening of the Central Asia-China pipeline, which gives Turkmenistan a major export outlet other than Russia, is a true “game changer,” and that along with the development of new LNG infrastructure, the promising results of “unconventional gas” developments in Hungary show that Europe‟s security of supply is not exhausted by the pipelines game. Keywords: Energy security, Southern Corridor, Nabucco, South Stream, Nord Stream, White Stream
1. Introduction: The EU-Russia energy interdependence
The EU currently imports more than 40% of its natural gas from Russia, a figure which is expected to rise to 60% by 2030. The level of dependence is
1
considerably higher for a number of European states which rely on Russian imports for virtually their entire gas needs.1 The situation did become a public concern during the Russo-Ukrainian “gas war” of January 2009, which left parts of South-East Europe in the cold for two weeks in the middle of the winter. Gazprom, the monopolist exporter owned 51% by the Russian state, which produces around 19.4% of the world’s total output of natural gas, sells two thirds of its gas to the EU countries. In 2006, for instance, Gazprom’s gas sales to Europe
References: Barysch, Katinka (ed.), 2008. Pipelines, Politics and Power. The Future of EU-Russia Energy Relations, London: Centre for European Reform Deutche Welle, 2009. “Proposed Nabucco Pipeline Gets European Bank Backing,” 27 January 2009 Deutsche Presse Agentur (dpa), 2009. “Gazprom Agrees to Boost Pipeline Capacity,” Downstream Today, 15 May 2009 Flauger, Juergen, 2009. “Bau der Ostsee-Pipeline im Zeitplan,” Handelsblatt, 8 October 2009 Gutlederer, Christian, 2008. “Nabucco Pipeline Cost Rises to €7.9 billion,” Reuters, 29 May 2008 Harrison, Pete, 2009. “EU Energy Funding Seeks to Kick-start Nabucco Project,” Reuters, 28 February 2009 Ilic, Igor, 2009a. “Russian Gas Cut May Spur Croatia LNG Project,” Reuters, 20 January 2009 Ilic, Igor, 2009b. “Croatia, Investors See No Delay for LNG Terminal,” Reuters, 3 March 2009 Kardas, Saban, 2009. “Turkey Pursues Economic Integration With Iraq,” Eurasia Daily Monitor, Vol. 6, Issue172, 21 September 2009 Kardas, Saban, 2010. “Turkey Signals a Shift on French Participation in Nabucco”, Eurasia Daily Monitor, Vol. 7, Issue 51, 16 March 2010 Mankoff, Jeffrey, 2009. “Eurasian Energy Security,” Council on Foreign Relations, Special Report No. 43 Martinez, Andres R. and Jessica Resnick-Ault, 2010. “Europe Needs Gas Infrastructure Spending, Scaroni Says,” Bloomberg.com, 10 March 2010 Mitrova, Tatiana, 2008. “Gazprom’s Perspective on International Markets,” Russian Analytical Digest (Gazprom‟s Foreign Energy Policy), No. 41, 20 May 2008 25 offshore-technology.com, 2009. “Shtokman Gas Condensate Deposits Barents Sea, Russia”, 30 April 2009 offshore-technology.com, 2009. “Rotterdam Builds LNG Gateway,” 30 April 2009 OilVoice, 2008. “Krk Confirmed as Location for Adrian LNG,” 3 October 2008 Petersen, Alexandros, 2009a. “Will Azerbaijani Gas Exports to China Scuttle South Stream?”, Central Asia-Caucasus Institute Analyst, 12 September 2009 Petersen, Alexandros, 2009b. “Nabucco Ahead of South Stream?,” Atlantic Council (www.acus.org), 7 October 2009 Petersen, Alexandros, 2009c. “The Molotov-Ribbentrop Pipeline,” The Wall Street Journal, 9 November 2009 Petersen, Alexandros, 2009d. “Yet More Delays for Nabucco,” Atlantic Council (www.acus.org), 17 December 2009 Rettman, Andrew, 2009. “Germany Issues Gas Pipeline Permit as Europe Freezes,” euobserver.com, 22 December 2009 Runner, Philippa, 2009. “Nord Stream to Pump EU Gas by 2011, Gazprom Says,” euobserver.com, 20 January 2009 Russland-Aktuell, 2009. “Ostsee-Pipeline: Roehrenwerk auf Ruegen lauft an,” 20 April 2009 Shiryaevskaya, Anna, 2010. “Russia Rejects Eni Call to Merge Europe Gas Pipelines,” Bloomberg.com, 15 March 2010 Socor, Vladimir, 2009a. “Gazprom Reveals Unaffordable Costs of the South Stream Project,” Eurasia Daily Monitor, Vol. 6, Issue 29, 12 February 2009 Socor, Vladimir, 2009b. “Samsun-Ceyhan Pipeline Project Designed to Divert Kazakhstani Oil,” Eurasia Daily Monitor, Vol. 6, Issue 196, 23 September 2009 Socor, Vladimir, 2009c. “Turkey: A Bridge of Bottleneck for Caspian Gas to Europe?,” Eurasia Daily Monitor, Vol. 6, Issue 193, 21 October 2009 Socor, Vladimir, 2009d. “Azerbaijan can Resort to Multiple Options for its Gas Exports,” Eurasia Daily Monitor, Vol. 6, Issue 194, 22 October 2009 Socor, Vladimir, 2009e. “White Stream can De-Monopolize the Turkish Transit of Gas to Europe,” Eurasia Daily Monitor, Vol. 6, Issue 199, 29 October 2009 26 Socor, Vladimir, 2009f. “Scandinavian Governments Allow Russo-German Nord Stream Pipeline,” Eurasia Daily Monitor, Vol. 6, Issue 207, 10 November 2009 Socor, Vladimir, 2009g. “Nord Stream Pipeline Project Still Short of Resources,” Eurasia Daily Monitor, Vol. 6, Issue 209, 12 November 2009 Socor, Vladimir, 2009h. “Moscow Backtracks From Strategy to Bypass Ukraine’s Gas Transit System,” Eurasia Daily Monitor, Vol. 6, Issue 216, 23 November 2009 Socor, Vladimir, 2009i. “Three Central Asian Countries Inaugurate Gas Export Pipeline to China,” Eurasia Daily Monitor, Vol. 6, Issue 230,15 December 2009 Socor, Vladimir, 2009j. “Strategic Implications of the Central Asia-China Pipeline, I,” Eurasia Daily Monitor, Vol. 6, Issue 231, 16 December 2009 Socor, Vladimir, 2009k. “Strategic Implications of the Central Asia-China Pipeline, II,” Eurasia Daily Monitor, Vol. 6, Issue 233, 18 December 2009 Socor, Vladimir, 2009l. “Moscow Targeting Adriatic Energy Transportation Lifeline to Central Europe,” Eurasia Daily Monitor, Vol. 6, Issue 233, 18 December 2009 Socor, Vladimir, 2010a. “South Stream: A Casualty of Moscow’s Excess Pipeline Capacity Building”, Eurasia Daily Monitor, Vol. 7, Issue 52, 17 March 2010 Socor, Vladimir, 2010b. “TNK-BP Kovykta Project License Under Threat of Revocation,” Eurasia Daily Monitor, Vol. 7, Issue 53, 18 March 2010 Socor, Vladimir, 2010c. “Nord Stream Downloads Financial Risks on German and Italian Governments,” Eurasia Daily Monitor, Vol. 7, Issue 55, 22 March 2010 Socor, Vladimir, 2010d. “Arms Twisted, Hands Empty: Ukrainian Prime Minister Azarov in Moscow”, Eurasia Daily Monitor, Vol. 7, Issue 59, 26 March 2010 Stratfor, 2009a. “Azerbaijan: Looking at CSTO Membership,” 9 December 2009 Stratfor, 2009b. “Energy: A Natural Gas Cartel,” 9 December 2009 Stratfor, 2009c. “Central Asia: Russia Moves to Keep Uzbekistan in Line,” 22 December 2009 Stratfor, 2010. “Russia, Croatia: Courting Zagreb on Energy”, 3 March 2010 Stratman, Klaus, 2009. “Ostsee-Pipeline Soll Bereits 2011 Realitaet Sein,” Handelsblatt, 28 December 2009 27 Torello, Alexandro, 2008. “Nabucco Construction Pushed Back to 2010,” Downstream Today, 22 February 2008 upi.com, 2009. “South Stream Focus on Moscow-Vienna Talks,” 10 November 2009 upstreamonline.com, 2009. “Merkel Pushes Nord Stream Support,” 24 January 2009 Vedomosti, 2009. “Putin Proposes Using Foreigners to Develop Yamal Deposits,” RIA Novosti, 22 September 2009 Vidalon, Dominique, 2009. “EDF in Talks on Stake in South Stream Pipeline”, Reuters, 30 October 2009 Wall Street Journal (WSJ), 2008. “Exxon Deal Puts Obscure Gas Deposit on Map,” 26 June 2008 Youngs, Richard (ed.), 2009. Energy Security: Europe‟s New Foreign Policy Challenge, Taylor & Francis Routledge Note on the contributor Radu Dudău is associate professor in the Philosophy Department of the Bucharest University. He teaches International Relations Theory, Ethics of International Relations, and Analysis of International Conflicts. He is also the Head of the Research Department at the Romanian Diplomatic Institute. In his policy-related research, he focuses on Eurasian energy security, the geopolitics of the Wider Black Sea Region, and Trans-Atlantic relations. 28