'TURKEY KEY PLAYER IN REALIZING OF NABUCCO'

Today's Zaman
http://www.todayszaman.com/tz-web/detaylar.d o?load=detay&link=165728&bolum=8
Feb 2 2009
Turkey

Interviews

Sinan Ogan, director of the Turkish Center for International Relations
and Strategic Analysis (TURKSAM), has said Turkey has a greater role
to play in the creation of the Nabucco pipeline project, which is
to bring gas from the Caspian region to gas-hungry EU countries via
Turkey and Georgia, in view of the fact that the problem of securing
gas sources for the pipeline has not been solved yet.

"The Nabucco pipeline can initially work with 8 billion cubic meters
of natural gas a year but, looking ahead, it will need around 30
billion cubic meters of natural gas.

Judging by current conditions, this is not that easy, and thus
natural gas supplies from Iran and Iraq are indispensable," Ogan said,
adding that Turkey's strength in this project is its dialogue with
the various Turkic republics, Iran, Iraq and Egypt.

The Nabucco pipeline, about 3,300 kilometers in length, will start
at the eastern border of Turkey, running through Bulgaria, Romania
and Hungary to end in Baumgarten, close to Vienna. Construction
is supposed to start in 2011 and it is hoped to be operational in
2014. The estimated construction cost is around 7.9 billion euros.

Ogan said it is not realistic to expect that the foundations for this
project will be set by the first half of 2009. Even just the signing
of agreements for Nabucco this year will be an "enormous success"
considering that the Nabucco meeting in Hungary last week did not
draw as many heads of state as expected.

He recently shared his thoughts on this issue with Monday Talk.

In the wake of the tensions over natural gas that have threatened
relations between Russia and the Ukraine, as well as many European
countries and Turkey, there was a summit held on Jan. 27 in Hungary. Is
the only real factor driving the Nabucco project the threat to European
countries arising from their inability to come to an agreement with
Russia on the question of natural gas?

Sinan Ogan, expert on Eurasia and the Middle East

He is the director and founder of the Turkish Center for International
Relations and Strategic Analysis (TURKSAM) and expert on Eurasia and
the Middle East. He worked as a lecturer at Marmara University and as
a dean and economics lecturer at the University of Azerbaijan. He was
the coordinator for the Turkish Cooperation and Development Agency
(TÄ°KA) in Azerbaijan. He has served as a researcher on energy and
foreign politics regarding Eurasia and the Middle East for several
institutions, including the Eurasian Strategic Research Center
(ASAM), where he was the head of the Caucasian, Russian and Ukrainian
department from 2001 to 2006.

Among his books are "Turuncu Devrimler" (Orange Revolutions, 2006),
"Rusya'da Politika ve OligarÅ~_i" (Politics and Oligarchy in Russia,
2003), and "Azerbaycan" (Azerbaijan, 1992).

No, this is not the only influential factor, though we could say that
this is currently at the forefront of other factors. In terms of the
mid and long term, the need for natural gas in the European Union will
increase dramatically. And as the EU's own consumption levels rise,
its petrol and natural gas reserves are quickly being used up. If
the production and consumption trends continue along current lines,
all of the resources will be used up in less than 15 years from now,
and the EU will be much more dependent on Russia, the Middle East,
Algeria and Norway. In 2007 the EU imported 61.5 percent of the
natural gas it consumed and put into storage for itself.

What is the anticipated share of Russian natural gas in future
EU imports?

By the year 2030, the EU will be importing up to 80 percent of the
natural gas it uses from non-EU nations, and the share held by Russia
in this amount -- which is currently 25 percent -- will rise to 30
percent. So Russia is actually quite far from being able to fulfill
on its own all of the EU's natural gas needs; even if it wanted to,
it couldn't. Russia's own consumption levels are rising and, in the
meantime, it is also looking to sell to China and Japan. These are
some of the other factors currently at work. In any case, the clashes
experienced between Russia and Ukraine over the past few years,
as well as the war that took place between Russia and Georgia and,
of course, the fact that Russia is generally using its natural gas
supplies as an effective vehicle for foreign policy, all of this is
working to push the EU to find alternative sources for energy.

The Nabucco project has been on the agenda since 2002, but as of
yet there hasn't been any success in implementing it. What are the
factors keeping this project from starting up?

The first work in regard to the Nabucco project goes back to
February 2002, when Turkey's BOTAÅ~^ [state-owned Turkish Pipeline
Corporation] had talks with Bulgargaz [Bulgaria], Transgaz [Romania]
and OMV Erdgas [Austria], which in turn led to the signing of the
Oct. 11, 2002 cooperation agreement. In February 2008, the German RWE
company joined up as the sixth equal partner in this endeavor. There
are many reasons that all this has not yet led to results. One of
these reasons is the lack of a clear and shared energy policy in the
EU. While the EU is saying that the Nabucco project should go ahead,
there are also many EU nations that have gotten in line to make all
sorts of contracts and agreements with Russia, which does not want
to see Nabucco happen. In fact, some EU nations even want to become
partners in the Nabucco project's greatest competitor, the South
Stream project, which originates from the Russian Black Sea. So the
EU stance is in itself problematic.

Another problematic aspect of the Nabucco project is the securing of
natural gas, is it not?

There are long-term agreements that exist between Russia and
Turkmenistan and Kazakhstan --both of which could be important
resources for this project. The fact that the EU does not count
Uzbekistan, despite its rich natural gas resources, as a nation from
which it can procure natural gas, the status of the Caspian Sea and
attractive offers made by Russia to Azerbaijan all work to bring up
the important question of where we will get the natural gas that is
to run through this pipeline.

'Turkey's strength in this project is its dialogue with the various
Turkic republics, Iran, Iraq and Egypt, as well as its geographic
position. Turkey may well inspire these nations to participate in
the Nabucco project'

How crucial is the involvement of Iranian and Iraqi natural gas in
the project?

In order for the Nabucco project to be realized, first and foremost
there need to be investments made in the natural gas fields of
Turkmenistan, Kazakhstan, Uzbekistan and Azerbaijan by Turkey, EU
nations and the US. But these countries have also sold their ready
gas supplies through contracts with Russia, China and Iran. Following
Russia, the country with the next largest supply of natural gas is
Iran. For now, though, Iran is being kept from supplying its natural
gas to pipelines running to the west; however, with new US President
Barack Obama's recent moves on the Iran front, and especially if a
reformist wins in the upcoming elections in Iran, we might just see
Iran-US relations at a point we might have never guessed at. Iranian
natural gas must, in any case, be a part of the Nabucco project. The
same goes for Iraqi natural gas. If stability finally comes to Iraq,
Iraqi natural gas should be fed into the Nabucco pipeline. The Nabucco
pipeline can work initially with 8 billion cubic meters of natural
gas a year but, looking ahead, it will need around 30 billion cubic
meters of natural gas each year. Judging by current conditions, this
is not that easy, and thus natural gas supplies from Iran and Iraq
are indispensable.

Turkey has made attempts to include Russia in the Nabucco project,
but do you think that's really acceptable to the EU nations, which
want to reduce their reliance on Russia?

There is little doubt that Nabucco won't have a great chance at success
without the participation of Russia and Iran. As it is, the Russian
ambassador to Ankara, Vladimir Ivanovsky, expressed this same thought
clearly at a panel entitled "Multi-dimensioned Relations in the Energy
Arena Between Russia and Turkey." The panel took place last Thursday
and was sponsored by TURKSAM. Nevertheless, Nabucco was imagined
as an alternative to Russia's pipelines. I would like to reiterate
a proposal that has been made in the past by TURKSAM. Russia should
bring into action the second Blue Stream pipeline project that it had
worked on before and combine this pipeline with the Nabucco line to
send natural gas to Europe in a larger capacity pipeline. With this,
not only would it end the need for the South Stream line that Russia
was planning to build, but it would be bringing about cooperation
rather than competition. And since Russia's simply being a part of
Nabucco wouldn't mean that it would have final authority over the
project, this would still be good for Europe.

Ambassador Ivanovsky reportedly said at the panel that Russia would not
be a part of the Nabucco project. Were you expecting this announcement?

The stance taken by Russia on Nabucco thus far has been one of
"belittling" the project by implying that no matter how much pipeline
was laid, that it would be of no use if there was no natural gas to
fill it with. In fact, there have been several top-level statements
made along these lines. And despite the fact that the global financial
crisis has deeply affected Russia, Russia has still announced that
it is not going to give up on its South Stream project. Actually,
we had recently believed that there was a slight chance that Russia
could become a partner in Nabucco. But since the person who will
have the last word on this subject is Prime Minister Vladimir Putin,
I still think it is possible that Russia will alter its stance in
the coming days and Russia will once again bring the proposal for
the second Blue Stream to the agenda.

In the meantime, Georgia appears to believe that the Nabucco project
will strengthen its own ties to European countries, and thus wants
to see this project realized. Does this bother Russia?

We must not ignore the fact that Nabucco may well pass both through
Georgia and Armenia. In fact, if Turkey's new moves on the Armenia
front are not derailed by the Obama administration's recognition in
April of the events of 1915 as "genocide," there is actually quite
a high chance that this pipeline could run through Armenia. At this
stage, due to Russia's general display of opposition to the project,
it is not really important whether this pipeline runs through Georgia
or Armenia.

You have argued that the subject of the deepening partnership between
OMV and Gazprom is something that needs to be examined. Why?

Austria, which has been appointed as a project coordinator for
Nabucco, and the Austrian company OMV have a passive stance on this
subject. There have been some serious attempts at partnership between
OMV and Gazprom. So one of the most unfortunate aspects of this project
was seeing Austria appointed coordinator for it rather than Turkey,
because neither Austria nor OMV are going to contribute to making it
a reality. In fact, the very partnership between OMV and Gazprom is
a signal of just how little initiative OMV is going to take in the
Nabucco project. Only a few weeks ago, OMV agreed with Gazprom in
terms of Gazprom buying a 50 percent share in the Central European
Gas Hub, and in terms of new distribution and stock facilities.

To what do you tie the fact that European nations only want to see
Turkey take its place as a transit country within the Nabucco project?

One of the biggest points of disagreement between Turkey and the EU
these days is the question of whether Turkey is to be only a transit
country, or whether it will have a say in this project. BOTAÅ~^
currently has an equal amount of shares -- 16.67 percent -- in Nabucco
Gas Pipeline International. The Nabucco project is one in which BOTAÅ~^
has played a leading role. In addition, Turkey wants to meet some of
its own natural gas needs with this pipeline and wants to purchase
this gas at more reasonable prices than will be charged once the gas
reaches Austrian borders.

The president of the European Commission, Jose Manuel Barroso, has
said there should be no ties made between Turkey's accession talks
and energy security. Does Turkey use natural gas as a trump card?

Actually, the Nabucco project is not economically to Turkey's
advantage. In fact, Turkey could build another line altogether and
procure its own gas needs from Central Asian republics. But this line
has strategic importance. Many nations, led by Russia, of course,
are these days using natural gas as a foreign policy tool. In his
meetings with the EU, Erdogan has for this reason put stress on the
Nabucco project, indicating that this was a possibility for Turkey,
too. In fact, the Nabucco project represents one of the most important
trump cards held by Turkey in the face of the EU.

What can Turkey do in order to achieve what it wants regarding this
project?

Turkey's strength in this project is its dialogue with the various
Turkic republics, Iran, Iraq and Egypt, as well as its geographic
position. Turkey may well inspire these nations to participate in the
Nabucco project. But not everything depends on Nabucco, and Turkey
always needs to keep alternative plans alive. Turkey also needs to look
at renewable energy sources and make investments in this area. You
see from Obama's appointments for energy-related posts that the new
administration in the US is placing high importance on this factor,
too. This is true all over the world.

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