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2015-03-09 19:10:00

THE HORRIBLE RUSSIAN GAS

THE HORRIBLE RUSSIAN GAS

Energy exports are a useful weapon, but one that can only be wielded only once.

If Russia persists with its latest move in the long drawn-out battle over Europe's gas supply, it will open the gates to the competition it has feared for the past decade and more.

Europe gets 30 per cent of its gas from Russia – still mostly transported through Ukraine, despite the opening of a new pipeline under the Baltic directly to Germany. Previous cut-offs of gas through Ukraine, most seriously in 2009, and the continuing conflict there, have made Russia look for alternative routes.

But in December, it gave up on plans for South Stream – a line under the Black Sea to Bulgaria, after legal objections from the EU. The Europeans were in no mood to make life easy for Russia's monopoly Gazprom while imposing sanctions on the country over its support for forces fighting Kiev in eastern Ukraine.

Instead, Gazprom announced plans for an alternative route – Turkish Stream – under the Black Sea to Turkey. From there, if Russian gas is to find its way to the main markets in central Europe, then pipelines through the Balkans must appear from nowhere by 2019. The Gazprom chief executive Alexei Miller said: "Now it is up to [our European partners] to put in place the necessary infrastructure starting from the Turkish-Greek border."

The EU has sought increasingly since 2009 to diversify its supplies, but has faced obstacles. Environmental groups – funded by Russia, according to the Nato secretary general Anders Fogh Rasmussen – have campaigned against shale gas, leading to moratoria in Romania (now lifted), and in Bulgaria, which gets 87 per cent of its gas from Russia.

Meanwhile, Russia has been happy for the nuclear negotiations and sanctions on Iran to be endlessly drawn out, preventing the country, according to BP the state with the world's largest gas reserves, from competing with it.

The Nabucco pipeline was meant to bring gas from the Middle East and Central Asia to Europe, the so-called Fourth Corridor (the first three are the routes from Norway, North Africa and Russia). But Nabucco lacked enough heavyweight backing from gas companies and EU institutions, and never managed to secure enough gas supply.

Of its target countries, Iran was hit by sanctions and anyway struggled to produce enough gas to meet domestic demand, while Iraq and its Kurdish region are still at an early stage of developing gas for domestic use. Enigmatic Turkmenistan would have to build a pipeline across the disputed Caspian Sea, through the territory of its competitor Azerbaijan, in the face of Russian disapproval.

But Turkish Stream opens the way to a revival of the Fourth Corridor. If the EU is compelled to build expensive new gas pipelines from Turkey through south-east Europe, it can carry gas from anyone. The bloc's proposed Energy Union would create a more coherent energy policy, not hostage to the vagaries of individual members. The small Balkan markets, currently dependent almost entirely on Russian supplies, would be integrated into a pan-European network.

Turkey does not want to be overdependent on Russian gas either – it has devoted much effort to diversifying its imports, with Azerbaijan and the Kurdish region of Iraq the best bets. In the longer term, a post-sanctions Iran could become the Fourth Corridor's largest supplier and a real competitor to Russia in Europe.

Europe can find alternative suppliers. It is, in large part, the inertia of expensive infrastructure that has slowed its quest so far. In contrast, Russia has no other customers that can replace Europe for reliability and value. China is an important long-term market, but far away, expensive to reach and already playing off Russian against Central Asian gas. If Turkish Stream unlocks the iron gates of the Fourth Corridor, Russia will find it has itself brought about what it most feared.

thenational.ae

Tags: RUSSIA, TURKEY, GAS, EUROPE, GAZPROM