Southern Europe may now also be home to competing oil pipelines
Another pair of competing pipelines may be built in South-Eastern Europe; the history of the Nabucco and South Stream gas pipelines may soon be revisited in the Samsun-Ceyhan and Burgas-Alexandroupolis oil pipelines, although this time Russia could be involved in both projects. Russia has agreed to get involved in the Samsun-Ceyhan project in exchange for Turkish support for Gazprom projects.
GREEN LIGHT FOR SOUTH STREAM
On August 6, 2009, a Russian delegation headed by Prime Minister Vladimir Putin visited Ankara, where it resolved several energy issues, primarily those related to natural gas sales. First, Ankara gave Russia the authorization it needed to build the South Stream gas pipeline in Turkish territorial waters. According to the protocol for cooperation in the gas sector, which was signed by Vladimir Putin and his Turkish counterpart Recep Tayyip Erdogan on August 6, Istanbul will allow Russia to conduct seabed and environmental surveys for the proposed natural gas pipeline in Turkish territorial waters. This implies Turkey's preliminary consent to the construction of the pipeline and eliminates the need for an agreement with Kiev that would allow Russia to build the pipeline through Ukrainian territorial waters, as was originally planed. Nevertheless, no date was named at the August 6 meeting for the beginning of construction.
Vladimir Putin also said that Russia and Turkey had reached an agreement on the Blue Stream-2 project. "We are beginning to look into the possibility of building a second branch of the Blue Stream pipeline and subsequently exporting natural gas to third-party countries through Turkey," Putin said. According to the prime minister, this natural gas would go to Cyprus, Israel, Lebanon and Syria. The annual projected capacity of the Blue Stream pipeline is 16 billion cubic metres. In 2008, 10.5 billion cubic metres of natural gas were transported through the pipeline.
OIL FOR GAS
Nevertheless, in exchange for Turkish consent to South Stream, Russia will have to participate in a new, Turkish-supported proposed oil pipeline that was not initially part of Russia's plans.
According to the bilateral protocol on cooperation in the oil sector that was signed, a working group will examine the possibilities for joint participation in the project to build an oil pipeline through Turkey from the Black Sea port of Samsun to the Mediterranean port of Ceyhan. Previously Russia had planned to take part only in the construction of the Burgas-Alexandroupolis oil pipeline through Bulgaria and Greece. Yury Ushakov, deputy head of government staff, has previously stated that Russia's participation in the Samsun-Ceyhan project is the initiative of Turkey, not Russia.
To avoid the deterioration of its relations with Bulgaria, Russia intends to provide resources for both pipelines. "These are two different projects. Everything will go ahead as planned," said Transneft president Nikolai Tokarev, meaning that Russia's participation in the Samsun-Ceyhan project would not preclude the Burgas-Alexandroupolis project. According to Tokarev, the latter would start next summer.
The tentative annual capacity of the pipelines is 50 million metric tons each. For his part, Vladimir Putin said on Thursday that competition between the Nabucco and the South Stream gas pipelines has been more intense than it would be between the oil pipelines. Recep Tayyip Erdogan, his Turkish counterpart, said that experts know there are sufficient resources for both projects.
Nevertheless, the issue has not yet been fully decided, which Russian Energy Minister Sergei Shmatko almost admitted on Thursday. According to him, a working group will be set up in the near future to examine all problems related to the implementation of the Samsun-Ceyhan project. The group is to prepare a feasibility study that would help draw conclusions on Russia's resources.
"At present, 110 million metric tons of oil are transported annually through the Bosporus, which is the limit for the strait. The combined capacity of the two pipelines is approximately the same," says Valery Nesterov, an analyst with the Troika Dialog investment group.
In fact, the simultaneous implementation of the two projects would leave the Bosporus without tankers. "Their [tankers - Gazeta] should be amortised. Besides, Turkey receives transit pay. There is no new resource base. Russia plans to reduce oil transport via the Black Sea in order to transport it via the Baltic Pipeline System-2 (BPS-2)," Nesterov added. He believes the completion of one of these projects would delay the construction of the other pipeline for a long time.
RUSSIA REFUSES TO RATIFY ENERGY CHARTER TREATY
Prime Minister Vladimir Putin signed an executive order on the Russian government's decision not to ratify the Energy Charter Treaty, as well as on the Energy Charter Protocol on Energy Efficiency and Related Environmental Aspects.
Russia signed the Energy Charter Treaty and the Energy Charter Protocol on December 17, 1994, but they have not yet been ratified because Russia believes these agreements only take into account the interests of energy consumers. In spring 2009, President Dmitry Medvedev submitted an alternative draft of the Energy Charter Treaty, which, according to Russian government officials, takes into account the interests of all parties concerned, i.e., consumers, producers and transit countries.
OTHER DOCUMENTS RECENTLY SIGNED IN TURKEY
The Russian nuclear energy state corporation Rosatom and the Turkish Atomic Energy Authority signed an intergovernmental agreement on cooperation for the peaceful use of nuclear energy. This agreement has to do with the construction of the first nuclear power plant in Turkey.
Gazprom Export signed protocols of intent with Turkey's Calik (Chalik) Holding and Aksa Energy, allowing for Russian natural gas supplies to Turkey.
Rosneft signed memoranda of understanding with Aksa Energy on the construction of thermal power plants in Turkey and other countries in cooperation with Calik (Chalik) Holding, the Turkish Petroleum Corporation (TPAO) and the company TUPRAS.
Russia's Inter RAO UES signed a protocol of intent with Turkey's TETAS on electricity trading.
Andrei Biryukov
