Problems in the pipeline

A more diverse gas supply for the EU will improve energy security, but raises broader security concerns

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For more than a decade, the Nabucco project has symbolised the European Union’s desire to diversify its supply of gas away from Russia. On Friday (28 June), Nabucco’s hopes were dealt a possibly fatal blow, when Azerbaijan and an international consortium – led by BP and Norway’s Statoil – decided to send gas from Azerbaijan’s Caspian fields to the EU via another route, the Trans-Adriatic Pipeline (TAP).

All insist that this was a purely commercial rather than geopolitical decision, and the European Commission was officially neutral on the choice. But it was not purely commercial reasons that had made Nabucco a symbol of the EU’s desire for diversity, and prompted European commissioners to devote so much effort to pushing for a pipeline from Azerbaijan.

For the Commission, the choice of TAP throws into question the political investment it made in supporting the initial, much greater ambitions for Nabucco, to run 3,900 kilometre pipeline from Turkey’s eastern border. The surviving, abbreviated form of Nabucco – Nabucco West – is planned, like TAP, to run from Turkey’s western border.

But beyond that embarrassment, does the choice matter greatly now?

Importance

The Commission and Azerbaijan have both chosen to play down the importance of the decision. They say that Azerbaijan has enough gas to justify Nabucco West’s completion in addition to the TAP.

TAP, which should come on-stream in 2019, is designed to carry 10 to 20 billion cubic metres of gas per year; eventually, Azerbaijan could send 50 bcm a year westward (though a large share of that might go to Turkish customers).

Nor perhaps is the decision too painful for Bulgaria, Romania and Hungary, through which Nabucco West was to run. As the Commission says, each will soon have more than one supply route because Europe’s system of inter-connectors had been developed to ensure that, if Russia were to cut off their supplies, other EU countries could send them gas.

Moreover, given the prominence of Nabucco, it is easy to forget that TAP too will boost energy security in Europe (albeit not exclusively within the EU, as would have been the case with Nabucco West). TAP will run through Albania and will link up with the Ionian pipeline, which runs down the Adriatic coast.

This in turn will provide Bosnia with a supply not controlled by Serbia or Russia, and help Montenegro and Croatia.

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But this obscures the simple reality that Nabucco’s defeat leaves Bulgaria, Romania and Hungary overwhelmingly dependent on one supplier: Russia. They will remain so, until – or if – Nabucco West is built. That is a very big ‘if’: OMV, the Austrian company that led the Nabucco consortium has already said it is no longer interested in the project.

Influence

A less obvious cause for anxiety is geopolitical. Whichever choice was made, the decision marked Azerbaijan’s arrival as a significant player in European geopolitics, and Azerbaijan may have succeeded in maximising its influence.

In 2011, Azerbaijan agreed to build the Trans-Anatolian Pipeline (Tanap) with Turkey, so ending Nabucco’s initial ambitions to take gas across Anatolia; and increasing Azerbaijan’s influence over Turkey.

Azerbaijan has also increased its influence with Greece. Days before the choice of TAP was announced, the State Oil Company of Azerbaijan (Socar) bought a controlling stake in Desfa, the company that operates Greece’s gas network operator.

Azerbaijan will have a powerful voice in Greece. That may yet complicate Greek support for Cyprus in the dispute with Turkey over Turkish-occupied northern Cyprus. An additional possible benefit for Azerbaijan’s President Ilham Aliev is that Greece’s new, close relationship with Azerbaijan may weaken Greece’s traditional support for Armenia, with which Azerbaijan is still locked in a semi-frozen conflict.

Europe’s supply of gas will soon be more diverse and its energy security therefore greater. What is less certain is whether Europe’s broader security will be greater.

Authors:
Andrew Gardner