{"id":1075,"date":"2014-12-03T08:46:40","date_gmt":"2014-12-03T08:46:40","guid":{"rendered":"https:\/\/covcasbulletin.info\/?p=1075"},"modified":"2014-12-05T12:35:02","modified_gmt":"2014-12-05T12:35:02","slug":"winners-and-losers-in-the-black-sea-gas-game","status":"publish","type":"post","link":"https:\/\/covcasbulletin.info\/?p=1075","title":{"rendered":"Winners and Losers in the Black Sea Gas Game"},"content":{"rendered":"

By THOMAS DE WAAL
\nCarnegie Moscow Center<\/em><\/p>\n

Calling time on the South Stream pipeline project in Ankara this week, Vladimir Putin tried to spin it as a win nonetheless, by announcing a new Black Sea pipeline to Turkey instead.<\/p>\n

South Stream, everyone agrees, had simply become too expensive. Seven years and ten billion dollars after the project was first floated, Gazprom and the Russian government could no longer sustain the costs. Like its failed European twin, the Nabucco pipeline to Central Europe, it was too much of a geopolitical project and not commercially viable. In the duel between Nabucco and South Stream both sides lost, Steve LeVine wrote in Quartz, \u201cThe world\u2019s first pipeline war ended up having no victors at all.\u201d<\/p>\n

Instead, Putin said Russia was ready to construct a new pipeline across the Black Sea to Turkey which would deliver 63 bcm of gas per year, with 13 bcm going to the Turkish market and the remainder to a \u201cgas hub\u201d on the Turkey-Greece border from where it could carry on to European consumers.<\/p>\n

The announcement reshuffles the political energy map of Eastern Europe in a dramatic way.<\/p>\n

\"The<\/a>
The South Stream Pipeline System (http:\/\/www.south-stream-offshore.com\/news\/images\/the-south-stream-pipeline-system-349\/?per_page=48&page=4)<\/figcaption><\/figure>\n

The first loser in this maneuver is Putin himself. However much he tried to put a gloss on the news, he lost face and esteem, by being forced to ditch his prestige project. Bulgaria and Serbia have also lost out. They will have to say goodbye to the prospect of hundreds of millions of dollars of transit fees from South Stream.<\/p>\n

The European Union can celebrate a rare political success, having rallied enough support to kill off South Stream. Ukraine also scores a rare win, even as it faces disaster on many other fronts. After all, Moscow\u2019s political rationale behind promoting South Stream was to bypass Ukrainian territory.<\/p>\n

The biggest winner is Turkey. Turkey\u2019s ambitions to become an international gas hub are enhanced, with the prospect of it receiving big new gas supplies from Russia, alongside the quantities it already imports from the Caspian Sea, Northern Iraq, and Iran.<\/p>\n

Putin made his announcement standing next to the international leader he perhaps admires the most, Turkish president Recep Tayyip Erdo\u011fan, calling Turkey \u201cour strategic partner.\u201d He also announced that Russia would cut the price of its gas exports to Turkey by six percent from January 1. (By implication that also means the Crimean Tatars are also losers from this deal. Although Erdo\u011fan mentioned the Tatars, do not expect any real Turkish pressure on Russia over Crimea soon).<\/p>\n

The most intriguing question is what this all means for Azerbaijan, which has begun the awkward process of trying to convert itself from being an oil supplier to a gas supplier, as its oil revenues begin to decline. Azerbaijan\u2019s bet is to deliver gas to southern Europe via Turkey through the TANAP and TAP pipelines in five years\u2019 time.<\/p>\n

If it ever comes to fruition\u2014and that is a big if\u2014the new Russian-Turkish gas project could be a competitor to Azerbaijan gas ambitions and squeeze the profit margins of that project even more.<\/p>\n

But a new Russian Black Sea pipeline would still be a massive project and difficult to pull off. To get its gas to European markets, Gazprom would need to use the new TANAP pipeline, owned by a consortium which consists of BP, two Turkish companies (BOTA\u015e, TPO) and (the major shareholder), the Azerbaijani state oil company SOCAR. \u201cTANAP becomes major gas link,\u201d said one Azerbaijani commentator in response to the news.<\/p>\n

Already this year, Russia and Azerbaijan have been collaborating economically as never before. Azerbaijan has recently announced new trade deals with Russia to fill markets targeted by European Union sanctions. In October Baku played a major meeting of the sanction-hit Russian bank VTB.<\/p>\n

So the new Turkish deal may require more collaboration in the future, challenging the notion that Russia and Azerbaijan are always destined to be energy rivals.<\/p>\n","protected":false},"excerpt":{"rendered":"

By THOMAS DE WAAL Carnegie Moscow Center Calling time on the South Stream pipeline project in Ankara this week, Vladimir Putin tried to spin it [more >>>]<\/a><\/p>\n<\/div>","protected":false},"author":1,"featured_media":1076,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[18],"tags":[],"class_list":["post-1075","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-commentary"],"_links":{"self":[{"href":"https:\/\/covcasbulletin.info\/index.php?rest_route=\/wp\/v2\/posts\/1075","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/covcasbulletin.info\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/covcasbulletin.info\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/covcasbulletin.info\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/covcasbulletin.info\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1075"}],"version-history":[{"count":1,"href":"https:\/\/covcasbulletin.info\/index.php?rest_route=\/wp\/v2\/posts\/1075\/revisions"}],"predecessor-version":[{"id":1077,"href":"https:\/\/covcasbulletin.info\/index.php?rest_route=\/wp\/v2\/posts\/1075\/revisions\/1077"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/covcasbulletin.info\/index.php?rest_route=\/wp\/v2\/media\/1076"}],"wp:attachment":[{"href":"https:\/\/covcasbulletin.info\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1075"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/covcasbulletin.info\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1075"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/covcasbulletin.info\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1075"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}