The Prime Minister has called off his visit to the summit in Sofia.
The Russian Prime Minister Vladimir Putin yesterday cancelled his earlier planned visit to Sofia where he was to attend the summit Natural Gas for Europe: Security and Partnership. Also yesterday, ahead of the gas forum, the Kremlin unveiled Russia's proposals on a "new legal framework of international cooperation in the energy sphere". This may suggest that Russia does not expect anything useful to emerge from the meeting of gas suppliers and consumers: it has recently quarreled with both.
A visit that was not to be
Vladimir Putin is not going to Sofia to attend the gas summit of 28 countries of Europe, Central Asia and the US, the Prime Minister's press secretary Dmitry Peskov announced yesterday. Talking with our correspondent, he named two key reasons for the decision. First, the Bulgarian Prime Minister Sergey Stanishev is due in Moscow on April 27 and Mr Putin will be able to discuss with him the results of the conference as well as bilateral relations. Secondly, it is basically a conference of experts, which does not require that Prime Minister Vladimir Putin should attend. Instead, Energy Minister Sergei Shmatko will represent Russia at the forum.
However, the upcoming Moscow visit by the Bulgarian Prime Minister had been announced some time ago, back in March. Up until now the fact of two back-to-back visits did not seem a problem. The organizers of the Sofia forum, i.e. the Bulgarian President's Administration, insist on referring to the forthcoming Gas Forum as a summit implying that heads of state and government would attend. As late as yesterday morning the Bulgarian media reported that the President of the European Commission Jose Manuel Barroso, the Emir of Qatar Sheikh Hamad bin Khalifa al-Thani, Ukrainian President Viktor Yushchenko and Prime Minister Vladimir Putin would attend the summit. All this shows that the Russian Premier's cancellation of his confirmed visit was an event out of the ordinary.
The organizers of the summit announced yesterday that it would be attended by all the EU countries plus the US; energy suppliers such as Russia, Qatar, Azerbaijan, Kazakhstan, Turkmenistan and Egypt as well as current or potential transit countries: Ukraine, Turkey, Serbia, Moldova and Armenia.
"The last-minute cancellation of the visit to the Conference means that it is not expected to make decisions that are good for Russia and that top-level presence is not obligatory. The Prime Minister does not relish the prospect of finding himself in isolation. A lower status would be enough if Russia intends to ignore the adoption of unfriendly declarations", says Valery Nesterov of Troika-Dialog.
Transit country
Prime Minister Putin's appearance at the gas summit in Sofia could have been effective and justified if he were to unveil the Russian proposals regarding the document that would replace the Energy Charter Treaty. However, that has already been done by President Dmitry Medvedev during his visit to Finland on Monday. The document, called Conceptual Approach to the New Legal Framework of International Cooperation in the Energy Sphere (Goals and Principles) was yesterday published on the official presidential website kremlin.ru. Thus, Vladimir Putin will not be able to offer anything new to his colleagues at the summit. Recent statements by other participants in the upcoming summit demonstrate that the discussion is unlikely to take a course that would please Russia.
For example, President Ilkham Aliyev of Azerbaijan (whom the Bulgarian President had invited back in February) speaking last Saturday after a meeting with Dmitry Medvedev in Moscow lamented that Azerbaijan was unable to export all its gas because of unregulated relations with the transit countries. He added that he would like to sign agreements with Russia "both on transit and on the sale and purchase of gas". Meanwhile to reach Europe Azerbaijan's gas has to pass through two countries, Russia and Turkey. Neither of the two countries wants to be a transit country. Russia, for example, buys all the gas that enters it on its eastern borders and sells it at a different price on its Western borders. Turkey is putting forward similar demands, which are the main obstacle to the implementation of the Nabucco project.
Ilkham Aliyev's suggestion that Russia could not only buy but also transit Azeri gas, which Gazprom would allow in its own pipeline, is little short of being revolutionary. Russian legislation does not have the concept of transit, be it of gas, oil or electricity. Moscow has always used that factor as an advantage in the case of gas supplies from Central Asian countries. That accounts for Russia's formal refusal to sign the transport protocol to the Energy Charter which envisages that purchase and sale contracts would be signed between supplier and buyer while transit countries should not obstruct the free passage of gas through their territories, receiving non-discriminatory transit payments. Thus, if Russia had ratified the Energy Charter it would have enabled the EU to buy gas directly from Azerbaijan or the Central Asian Republics while Gazprom would have lost its monopoly and would have received only transit payment from these deals. Obviously the issue may be raised at the Sofia summit because the European Union's biggest worry is the reluctance of Russia and Turkey to be transit countries.
The Conceptual Approach to the New Legal Framework of International Cooperation in the Energy Sphere published yesterday may be used against Russia. The document says that the main principles of global energy cooperation must be "non-discriminatory access to international energy markets, their openness and development of their competitive character" and "transparency of all the segments of international energy markets (production/export, transit, consumption/import)." Compliance with these norms may mean that not only Ukraine should be an honest and transparent transitor of Russian gas, but Russia should be the same for Central Asian or Azerbaijani gas.
Two more principles set forth in the Conceptual Approach can be regarded as self-critical, i.e. as an attack on Gazprom. Thus, the document urges the need "to recognize safety of supply (delivery) and demand (transparent and predictable sale) as key aspects of global energy security" and "the creation and improvement of early warning mechanisms with the participation of suppliers, consumers and transit states". These principles were effectively broken by Gazprom during the recent conflict with Turkmenistan when the Russian gas monopoly gave just 24 hours notice to the Turkmen side about its dramatic cut of the use of Turkmen gas.
By the way, Azerbaijani President Ilkham Aliyev also said after his meeting with Dmitry Medvedev that any agreement with Russia must preclude a situation similar to that with Turkmenistan arising in the case of Azerbaijan. "We need guarantees that supplies will be stable regardless of any circumstances or the market situation".
A new pipeline
Turkmenistan will hold its own conference on energy supply security tomorrow, on the eve of the Bulgarian summit. President Gurbanguly Berdymukhamedov may go to Sofia immediately after that conference, having received an invitation personally from the Bulgarian Foreign Minister Ivailo Kaflin several weeks ago.
In the light of the recent conflict with Gazprom, Turkmenistan is unlikely to side with Russia in its dispute with Europe. Last week Turkmenistan signed a memorandum on long-term cooperation with the German concern RWE whereby RWE will develop Caspian gas fields. In addition, as the Chairman of the company's Board of Directors said in an interview with the official newspaper Neitralny Turkmenistan, "the company's task is to help Turkmenistan deliver its wealth to the world markets." Supplies of Turkmen gas to European markets ideally should go via the Trans-Caspian gas pipeline bypassing Russia, RWE CEO Jurgen Grossman said.
To clear up the situation Deputy Prime Minister Igor Sechin will go to the energy conference in Ashkhabad tomorrow. He had been ordered by Vladimir Putin last week to "keep watch on Turkmenistan" immediately after the signing of the agreement with the RWE.
The same conference will be attended by US Under Secretary of State George Kroll and the Georgian Prime Minister Nika Gilauri. The latter has already announced that he would discuss the prospects of Turkmenistan joining the White Stream gas pipeline project that would pass from Azerbaijan and Georgia across the bottom of the Black Sea to Ukraine skirting both Russia and Turkey. The idea of such a gas pipeline was put forward several years ago by the Ukrainian Prime Minister Yulia Tymoshenko. Since then what seemed a pipe dream has become a feasible and fairly safe project considering that in accordance with the recent Brussels declaration the Ukrainian gas transportation system could be put under EU's operational management. Last week a memorandum on the implementation of the White Stream was signed, the European Union having decided to allocate three grants for work preceding the project. The White Stream is likely to be seriously discussed at the Sofia gas summit.
The situation when European gas consumers as well as some producers are ready to use the Sofia summit to form a united front against Russia and Turkey does not bode well at all for Vladimir Putin's participation in the forum. A new Russian "Conceptual Approach" is unlikely to distract the attention of Europeans.
Mikhail Grib
