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Russia Dominates ‘Great Game’ With Fresh Moves #Energy

Moscow is gaining more influence through new deals to provide natural gas for Europe and might become the sole supplier in the continent soon, experts say.
Russia, which has constructed pipelines, and knows how to play the game, Necdet Pamir says.

Russia’s Gazprom has taken another step forward in a fierce competition to carry natural gas to the European Union after a hot week of deals, share transfers and critical decisions.

The EU’s decision last week to “directly” negotiate a treaty with Azerbaijan and Turkmenistan was a move that weakened Turkey’s position in both buying and transferring natural gas to Europe, according to Necdet Pamir, a board member at the World Energy Council Turkish National Committee.

Turkey has already signed “unbeneficial” accords regarding Nabucco, the languishing project to carry Caspian gas to Europe, according to Pamir. “Nabucco is an important project for both Europe and Turkey in terms of supply security,” he told the Hürriyet Daily News, adding that current contracts are not in Turkey’s favor.

“The state-owned Turkish Pipeline Company, or BOTAŞ, correctly insisted on better transfer prices and the right to sell the gas in a bid to turn the country into an energy hub,” Pamir said. “Unfortunately, the government could not achieve these benefits.”

Azerbaijani Industry and Energy Minister Natig Aliyev said last week that the remaining conflicts between Turkey and his country about a supply deal are over costs.

Stronger Moscow

Russia meanwhile reacted harshly to the EU’s decision to negotiate directly with Azerbaijan and Turkmenistan. “Outside attempts to meddle in affairs in the Caspian … could very seriously complicate the situation in this region [and] negatively affect the ongoing five-party negotiations on the Caspian Sea’s legal status,” the Russian Foreign Ministry said on its website.

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In another development, Russian behemoth Gazprom strengthened Moscow’s hand by adding France’s EDF and Germany’s Wintershall to its South Stream, and launching the Nord Stream. Russia announced that the first unit of Nord Stream, which will transfer gas to Germany via the Baltic Sea, bypassing Ukraine, will be finished by the end of this year. The project is expected to cut gas carried over Ukraine by 50 percent.

An energy market professional close to the issue said that with Nord Stream, which is a more concrete project than either South Stream or Nabucco, Russia is nearing its goal to become almost the sole natural gas supplier for Europe.

“Domestic production in Europe is falling since the resource in Norway is old,” the source told the Daily News, speaking on condition of anonymity. “Europe will have to meet 74 percent of its natural gas [needs] from Russia by 2030.”

Regarding possible suppliers of gas for the Nabucco pipeline, Pamir said Iranian resources can scarcely meet domestic demand of 137 billion cubic meters annually. “Iraq, another possible supplier, is facing political problems,” Pamir added.

Commenting on other handicaps of Nabucco, Pamir said the project’s initial cost was calculated at 4.6 million euros. “Today it is estimated at more than 12 billion euros,” he said.

“Russia has constructed pipelines and knows how to play this game,” Pamir said. “The U.S. is rising with shale gas, but Russia has the potential to become the main actor once again.”

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About The Author

A. Necdet Pamir

Petroleum engineer (METU graduate) and senior energy strategy and policy expert on world energy politics, energy security, sustainable energy policies and energy management. Worked for the national oil and gas company TPAO for 26 years; more than half of it being in managerial positions to include the Deputy General Manager status. Contributed to the successful implementation of Baku-Tblisi-Ceyhan Crude Oil Pipeline as a top level public servant for the Republic of Turkey with his dual capacity in TPAO and Prime Ministerial Pipeline Coordination Team. Lectured in 6 different universities and still teaching on energy policies, scenarios, strategies, sustainable energy, energy security and related matters in Bilkent & Atılım Universities, Ankara. Member of the Scientific Committee (Responsible for Subsea Resources), KOÇ University Maritime Forum (KÜDENFOR). Writes a column in monthly magazine Bütün Dünya (a Başkent University publication). Senior lecturer and prominent invited keynote speaker on intarnational conferences. Frequently interviewed by local and international TVs, radios and a well known writer on energy politics. Experienced top level manager both in public and private energy companies. Co-directed Deputy Chairman and General Coordinator) Turkey's first and most prominent think thank (Center for Eurasian Strategic Studies-ASAM) between 2000 (its establishment date) and 2007 as its Deputy Chairman and General Coordinator.

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