Eastern Europe

Turkey: Focal Point for Two Gas Pipelines


European opinion makers followed Russian Prime Minister Vladimir Putin's visit to Turkey in August with keen interest. Among the 20 or so agreements he and his Turkish counterpart, Recep Tayyip Erdogan, signed was one initiating Turkey's participation in the South Stream natural-gas pipeline to Europe – coming less than a month after Turkey hosted a summit for European Union countries participating in the Nabucco project, generally perceived as a rival to Russia's South Stream.

Since Putin's visit to Ankara, pundits and analysts have continued to speculate on the future of Turkish-Russian relations, the dynamics of their fast-growing bilateral trade (behind the EU, Russia is Turkey's prime trade partner), or Ankara's dependence on Russia for 65 percent of the natural gas and 25 percent of the oil it consumes. Missing from many analyses was the possible impact of South Stream on Turkey's relations with the European Union, especially the bloc's members with direct engagement in Nabucco.

JITTERY LAUNCH

Nabucco was formally launched – although the question of which countries will supply its gas is far from clear – at the July joint summit with Austria, Hungary, Bulgaria, and Romania, the four EU members the new pipeline is slated to traverse. The Russian authorities were also invited to the summit but chose not to attend. The project was designed to diversify Europe's energy supply with Caucasian, Central Asian, and Middle Eastern natural gas resources, but no potential source countries are formally on board yet.

Nabucco faces other problems as well. On 14 September a spokesman for the consortium in charge of the project said its completion would be delayed two years, until 2016, UPI reported. Any delay could be a gift to Russia, but as the Kremlin faces serious problems raising funds for its own energy projects, South Stream's construction could be slowed as well.

Some experts suggest that stagnation in Turkey's EU membership negotiations is the key to understanding Ankara's complex foreign policy. Turkish politicians from government circles, however, counter this notion.

"There is no link between the membership talks slowdown and Turkey's participation in the South Stream project," said Ozlem Turkone, a member of parliament for Istanbul and deputy chair of the ruling Justice and Development Party's foreign affairs department.

"Becoming an energy hub for the surrounding European and Asian regions has always been Turkey's objective, and participating in both the Nabucco and South Stream pipelines is part of it," she said. "Europe needs to diversify its sources of energy, and so does Turkey. Everyone will profit from our engagement in both projects."

Similar opinions were expressed by Turkish Foreign Minister Ahmet Davutoglu. Interviewed by the Turkish Kanal 7 TV channel, the minister said the South Stream project "creates a North-South energy corridor, similar to the East-West corridor of Nabucco," and therefore the two pipelines "are not substitutes for each other."

South Stream would cross Turkish waters in the Black Sea before coming ashore in Bulgaria; Nabucco is set to traverse the Caucasus and Turkey over land.

Still, such views draw criticism not only from many EU officials, who regard the pipelines as competitors and often accuse Russia of attempts to destabilize European energy security, but also from Turkey's opposition parties. "Before turning to profit, we had better check the financial side of the balance sheet in this project, which I believe is missing in the whole picture," said Mustafa Ozyurek, former general manager of Petrol Ofisi (PTOFS.IS), Turkey's major oil and gas distribution company, and currently an MP for the opposition Republican People's Party. Ozyurek said he and other experts believe the pipelines cannot both be operated cost-effectively, either by Turkey or the other partners.

However, "Nabucco itself can cover up to only 7 percent of the European Union's gas supply needs," Turkone said, adding that "in order to provide enough energy to the European market, we need to focus on both projects, none of which should be viewed as harming anyone's interests."

DIVIDED LOYALTIES

While many observers continue to perceive the Russian-backed South Stream pipeline as a threat to the energy security of many new EU states, ironically, it is some of those same countries that could hobble Nabucco's creation by their commitment to South Stream. Sezin Oney, a Budapest-based correspondent and columnist for the Turkish daily Taraf, said, "Hungary itself signed an agreement to join South Stream on 10 March, when Prime Minister [Ferenc] Gyurcsany paid a visit to Moscow. Despite Hungarians' generally distrustful approach to Russia, which is due to historical reasons, public opinion remains quite rational, in my opinion, about the pipeline issue. Be it South Stream, be it Nabucco – if the gas is supplied and affordable, the source does not matter either to the public or to the politicians."

Some of the most energy-insecure countries on the EU's eastern fringe, unsure of which pipeline has a better chance of being completed, are choosing to participate in Nabucco and South Stream alike. But the one neighboring country that is being bypassed in both scenarios is Ukraine. Seeing the clear deterioration of already strained relations between Moscow and Kyiv over Russia's continuing attempts to undermine Ukraine's current pro-Western stance, many European analysts agree that South Stream's main objective is to enlarge Moscow's political leverage over Kyiv.

During last winter's gas crisis, provoked by a Russian-Ukrainian dispute over gas and transit payments, Central and Eastern European public opinion generally sympathized with the Ukrainians, accusing Moscow of energy blackmailing its neighbor. Still, some Russian experts maintain that Central Europe should re-evaluate its stance on relations with Kyiv.

"Given the political and economical instability in Ukraine, I think that it is very much in Europe's interest to diminish this country's role in gas transit," argues Dmitri Babich, a political commentator with Russia Profile magazine, published by the government-owned RIA Novosti news agency.

"Prime Minister Putin came to Ankara to show Europe that Nabucco and South Stream can complement each other and that Russia is willing to cooperate with both Turkey and the EU," Babich said.

Such views reflect the official position of the Russian government. Decision-makers in Moscow understand that Europe disapproves of the political use of energy and generally try not to manifest it too openly. However, when speaking off the record, one can hear different voices from Russian diplomatic circles.

"The Kremlin is well aware of the fact that in the long term, Turkey will always strive to eventually join the EU, and we have already accepted it," said a senior official at the Russian general consulate in Istanbul who asked to remain anonymous. "Still, Ukraine's membership in NATO or in the EU is unacceptable, and its authorities should bear in mind that transit country status is not given forever."

On 13 July, at the Nabucco signing ceremony in Ankara, a special brand of wine, designed for this occasion, was distributed among the foreign guests. Composed of six wine strains, one from each country at the summit and one from Germany, it was produced to order for RWE (RWEG.DE), Germany's major energy supply company and a partner in the Nabucco project.

It seems that the next few months will be crucial not only for European energy solidarity, which will be tested by Russia's rival project, but also for the fate of those 600 bottles of special wine. If the EU Nabucco participants and Turkey don't let their commitments to Nabucco flag in favor of South Stream, politicians and diplomats will be able to exhibit the dry red Nabucco cuvée 2009 in their spacious offices with pride. Otherwise, the EU-backed pipeline's setback will definitely spoil the wine.
Jaroslaw Adamowski is a freelance writer who divides his time between Warsaw and Istanbul.

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