Emil Souleimanov and Josef Kraus
Dr. Souleimanov is an assistant professor at the Institute of International Studies, Department of Russian and East European Studies at Charles University in Prague. Dr. Kraus is a member of the Faculty of Social Studies in the International Institute of Political Science at Masaryk University in Brno, Czech Republic.1
Recent years have witnessed frantic efforts by the European Union (EU) to diversify its supply of strategic resources — crude oil and natural gas — to reduce its risky dependence on imports from a single country, Russia. At present, the share of oil imported from Russia to EU countries is at least 25 percent, and Russian natural gas accounts for a full 40 percent. In contrast to the situation in northern, western and southern Europe, the countries of central and eastern Europe are (almost) totally or very highly dependent on natural gas from the Russian Federation.
In Turkey, the diversification efforts of EU countries fit that country's economic and political interests. With its stable economic growth, Turkey itself has not only an ever-increasing demand for crude oil and natural gas, but also a strong interest in becoming a key Eurasian energy corridor. Achieving the standing of a strategic energy crossroads at the boundaries of Russian Siberia, the Caspian region, the Persian Gulf and the Middle East, in general, is central to the foreign-policy thinking of the ruling Justice and Development Party (AKP) as it strives for accession to the European Union.2
Turkey is located in or adjacent to regions where approximately three-quarters of known deposits of crude oil and natural gas are found, although it has only meager supplies of these resources inside its borders. Turkey produces about 1 billion cubic meters (m3) of natural gas annually, while it consumes about 36 billion m3, a level of dependency on imports greater than 95 percent. In the case of crude oil, its level of dependency on imports is 93 percent.3 Since the beginning of the Caspian oil boom more than a decade ago, Ankara has been attempting to play a significant role in the transport of strategic raw materials on the East-West route. The extraordinarily favorable position of the Asia Minor peninsula offers great transit potential for raw materials from the Caspian Sea, Russia and even the Persian Gulf/Middle East and Northern Iraq. Although the leading role in Turkish-EU energy cooperation is currently being played by the Brussels flagship project Nabucco — which is intended to secure supplies of natural gas from Caspian gas fields for the (Central) European Market — the Caspian route, as has been hinted, is not the only one. In recent years, there has also been a strengthening of cooperation between Ankara and Tehran regarding the transit of Iranian natural gas to the West. It is clear that under certain circumstances (discussed below), this cooperation could also play a significant role with respect to the raw material security of the European Union. Also of interest are the present status of and prospects for Turkish-Iranian cooperation on oil exports.
CRUDE OIL
Baku-Tbilisi-Ceyhan
A closely monitored project during the previous decade, which was finally realized in 2005-06 in spite of a number of reversals, was the Baku-Tbilisi-Ceyhan crude-oil pipeline (BTC). With a capacity of around 1 million barrels of Azerbaijani crude oil per day from the Azeri-Çirag-Güneşli oilfields, the line leads to the Turkish Mediterranean port of Ceyhan, with subsequent transport by tankers to the European Mediterranean.4 The arguments for building the BTC have been based on the need to reduce dependence on supplies of oil from Russia, favoring the competing Baku-Novorossiysk oil pipeline, and on helping to extricate the region (initially the South Caucasus and subsequently Central Asia) from Russian subjugation. The BTC, a 1,768 kilometer oil pipeline that cost $3.9 billion, has an expected service life of 40 years and is operated by Brtish Petroleum (BP) and the State Oil Company of Azerbaijan Republic (SOCAR). At present, it delivers only 1 percent of world demand for "black gold"; approximately two-thirds of its capacity has been reached.5 The economic potential of the BTC is thus rather limited, and one cannot say that it has made a very noticeable contribution towards ensuring the energy security of the EU. Many commentators assert that geopolitical factors, especially in the context of weakening Russian dominance in the area of the Caucasus and Central Asia and the penetration of the United States into the Caspian region, have prevailed over purely economic motives. Potentially, however, the pipeline is available for use at a moment when there is a greater involvement of other countries of the region in the export of crude oil to the West. At present, the whole Caspian region possesses 48 billion barrels of proven crude oil reserves, or 3.5 percent of the world's reserves. The dominant player in this field is primarily Kazakhstan, which currently possesses nearly 40 billion barrels of crude oil.6 In order for Kazakhstan to be able to increase its participation in exporting oil to European countries, it is first necessary to secure transport of the oil across the waters of the Caspian Sea (see below).
With respect to the topic at hand, however, one should not forget that the BTC is Turkey's first strategically significant project, the realization of which has made it possible to view Turkey as a promising Eurasian East-West energy corridor.7 Ankara also has solid revenue from the transit of Azerbaijani oil, now amounting to around $200 million annually. With the expectation of growth in the quantity of oil pumped in the years to come, up to 50 percent higher revenues are predicted. The realization of the BTC, then, has enabled Ankara to finally make use of the potential of its port at Ceyhan, the terminus of the oil pipeline leading from Kirkuk in northern Iraq. During the past two decades, however, supplies of Iraqi oil have been threatened repeatedly by instability;8 until 2006, insufficient use had been made of the potential of Ceyhan. Another benefit of the BTC is that it does not burden the Turkish straits with big oil tankers. From the standpoint of Turkey's efforts to negotiate accession to European structures, the BTC does not carry nearly as much weight as projects for the transport of natural gas. It can, however, still be viewed as one of the links underscoring the EU's growing dependence on Turkey as a key transit node for energy resources.
On the other hand, the BTC route is potentially risky. Above all, the pipeline runs just a few dozen kilometers from what is de facto the front line between Nagorno-Karabakh and Azerbaijan. There has been considerable tension between Baku and that rebellious enclave ruled by Armenians or by Armenia itself, even after a ceasefire was signed in 1994. In the case of a resumption of armed conflict, one would expect this pipeline to be an easy target for attack by Armenian forces or, more likely, by unofficial or semi-official combatants. Another potentially serious risk for the uninterrupted functioning of the BTC is the constant activity of Kurdish separatist fighters claiming allegiance to the Kurdish Workers' Party (PKK). The pipeline route is, in fact, in the immediate vicinity of areas regarded by the separatists as part of (northern) Kurdistan, and in the past, they have warned repeatedly that the BTC would be the target of attacks.9 So far, however, concentrated attacks on the pipeline by the PKK have not taken place, or they have been prevented. An exception was an isolated strike carried out in August 2008 by Kurdish separatists, demonstrating that similar attacks represent a potential danger that cannot be eliminated entirely.10 Representing a smaller risk for the functioning of the pipeline, given the entrenched status quo since the war in South Ossetia (August 2008), is its proximity to the zone of Russo-Georgian armed conflict.
The Trans-Caspian Pipeline
One — if not the only — possibility for making the BTC more economically efficient appears to be the potential participation of Kazakhstan, which geological surveys have shown to possess far richer deposits of crude oil than Azerbaijan. Kazakhstan's production is also increasing rapidly, having more than doubled between 1996 and 2002 to 1 million barrels per day and reaching 1.6 mb/d by 2009.11 The International Energy Agency estimates that Kazakhstan should reach peak production, approaching 4 mb/d, around 2030.12 According to preliminary agreements between Kazakhstan and Azerbaijan at the end of 2010, Kazakh crude oil would be shipped by tankers to Baku and then transported to Ceyhan through the BTC, even in the case of increased oil extraction at the Kashagan Field in Kazakhstan, where production is expected to increase in 2012.13 At present, however, one cannot say that the volume of oil shipped in tankers is stable; the volume varies from around 60,000 to 100,000 barrels per day.14
One of the possibilities for a stable connection from the rich deposits of southwestern Kazakhstan, especially from the Kashagan Field, to the BTC is the planned construction of a 700 km trans-Caspian oil pipeline to connect Atyrau in northern Kazakhstan with Baku. It would be laid along the floor of the Caspian Sea, and according to current calculations would cost nearly $3-4 billion.15 Although there is no talk at this time about the concrete amount of Kazakhstani oil that it would carry, it is estimated to be at least 1 million barrels of crude per day.16 Negotiations have been underway between Astana and Baku since 2005, with the contribution of the French company Total and the American-Kazakhstani concern TengizChevroil. Over those five years, there have been signings of a respectable number of memorandums and framework agreements, but no concrete progress to speak of.
Contributing to this situation are a number of factors. The building of a pipeline of any kind, whether for oil or gas, across the floor of the Caspian Sea has traditionally been the target of intense criticism by environmentalists from Moscow and Tehran. Another hindrance to further infrastructure development is the still unresolved status of the Caspian Sea. This has resulted in ambiguities regarding the spheres of influence of the individual countries. Nonetheless, it is clear that the building of this oil pipeline would represent a threat to the economic and security interests of Iran and, especially, Russia, which are trying to promote their own pipelines. Through the dominant operator of oil pipelines, the state company Transneft, Moscow has considerable influence in the Caspian Pipeline Consortium, with lines connecting the enormous Khazakstani Tengiz oil and gas field as well as Kashagan and Karachaganak with Novorossiysk (Russia). The securing of a monopoly over exports of Kazakhstani strategic resources flowing west now appears to be Russia's primary task. So far Moscow has succeeded in delaying the Trans-Caspian Crude Oil Pipeline project, along with an identical project calling for the transit of Central Asian natural gas along the floor of the Caspian Sea.
Samsun-Ceyhan
Another project that would bring relief to the overburdened Bosporus is the planned Samsun-Ceyhan crude-oil pipeline, sometimes also called the Trans-Anatolian Pipeline. Its goal is to create a crude-oil transit route from Samsun on the Black Sea to Ceyhan on the Mediterranean. Russia and Turkey are the primary interested parties in this project, to be built by the Italian company ENI. The pipeline would be 550 km long with a capacity of 1 to 1.5 million barrels per day.17 While Russia sees its advantage in being able to continue distributing crude oil from Kazakhstan to Europe without facing the limitations on shipping through the Bosporus, Turkey would welcome any transit alternative to its overburdened straits.
Odessa-Brody
This crude-oil pipeline (also known as Sarmatia) from the Ukrainian Black Sea port of Odessa to the city of Brody in western Ukraine, where it joins the Druz-hba pipeline, has been in operation since 2004. Until 2010, this route was used by Russian companies for the transport of raw materials from Russia to the Black Sea. Just recently, however, the direction of the flow of black gold has been reversed, from south to north. Ukraine, Belarus and Poland view this as an opportunity to lessen their dependence on Russian crude. Poland tends to be the country mentioned most often in this context, and an extension of the pipeline to Gdansk is being considered. From a different perspective, Odessa-Brody offers something of a future alternative to Turkey as an energy crossroads, although at present the project is also supplied with crude flowing for the most part across Turkish territory. The main supplier has become Azerbaijani's SOCAR; and transport is managed by the Ukrainian company UkrTransNafta and the Belarusian company Gomeltransneft, although sufficient supplies of crude have still not been definitively arranged and secured. (Most of the crude is shipped by tankers from Ceyhan across the Mediterranean, through the Bosporus and on to the Black Sea, causing problems in the already overburdened straits.18)
NATURAL GAS
Blue Stream
The exponential growth rate of Turkish natural-gas consumption, which has tripled during the past decades,19 has made it necessary to secure a sufficient supply as quickly as possible. Several years of negotiations with Moscow over the building of a pipeline to transport gas from a port near Novorossiysk to Samsun in northern Anatolia led to the construction of a 1,213 km pipeline along the floor of the Black Sea; it became functional in 2005. The project, which cost $3.2 billion, is currently transporting nearly 15 billion m3 of natural gas per year and has the potential to reach up to 16 billion m3, enough to supply less than two-thirds of Turkey's present gas needs.20 Particularly in light of the Russia-Ukraine disputes over the transit of Russian natural gas towards the West that have been taking place regularly since the spring of 2005 — and especially the major incident in January 2009 that threatened the supply to Central European consumers in the middle of a harsh winter — the need to diversify supply is being felt with increasing urgency in Ankara and other European capitals. This is yet another reason the attention of the Turks is turning toward alternatives from the Caspian Sea (i.e., from Iran) and other Middle Eastern countries.
From Russia's viewpoint, however, this is a pragmatic move, not only to gain a position as the main supplier to Turkey, but also to maintain its dominant role in energy projects in the Caucasus-Caspian area. The connection of Blue Stream to the Turkish transport network also gives the pipeline the potential to become one of the sources for Nabucco. This would ensure the shifting of raw materials to the planned gas pipeline, for which sufficient supplies have still not been secured (see below). From Russia's perspective, this would lead to the elimination of competition from the countries in the Caspian region and also to the exclusion of alternatives for supplying Europe, which would remain dependent on the Russian Federation. From the perspective of EU energy security, the desired diversification of gas sources would not come about, but rather merely the diversification of transport routes. This would eliminate dependence on Ukraine, but not Russia. The situation is further exacerbated by discussions about the Blue Stream 2 project, which is to be the de facto expansion of the existing pipeline. It would result in the further strengthening of energy ties between Turkey and Russia.
South Caucasian Gas Pipeline
Put into operation at the same time as the BTC crude-oil pipeline (2006) was the Baku-Tbilisi-Erzurum gas pipeline, known as the South Caucasian Gas Pipeline (BTE). It leads from Baku and follows alongside the BTC, connecting the rich Azerbaijani natural gas field Shah-Deniz in the Caspian Sea to Erzurum in Eastern Anatolia. The 692 km pipeline then empties into a network of smaller lines that are to secure the supply of gas mainly to the eastern and central parts of Turkey. The pipeline, dominated by BP and Statoil (Norway), is currently transporting 1.3 billion m3 of natural gas21 and has the potential to reach up to 20 billion m3 per year. Current volumes are relatively low, serving mainly to provide for the constantly growing demand in eastern Turkey, where winters are often harsh, as well as in Georgia, which has the right to buy 5 percent of the volume of transported gas annually.22 The potential of the BTE consists primarily of the actively discussed possibility of connecting to Kazakhstan (if its infrastructure is improved) and especially Turkmenistan through the Trans-Caspian Gas Pipeline (TCGP) from the east or Nabucco, which would connect Erzurum with Central Europe — and possibly through individual Turkey-Greece and Greece-Italy pipelines connecting to Southern Europe (see below).
In the Caspian region there are around 13 billion m3 of proven natural-gas reserves, representing 7 percent of worldwide supplies. The country with the largest reserves is Turkmenistan with nearly 8 trillion m3, followed at a distance by Azerbaijan with 1.4 trillion m3 and Kazakhstan with 2 trillion m3. Turkmenistan is also important in terms of production, with 41 billion m3 of natural gas annually; not far behind are Kazakhstan with 36 billion m3 and Azerbaijan with 17 billion m3. The International Energy Agency forecasts sharp growth in all of these countries in the next quarter century; production in Turkmenistan, for example, could climb to nearly 130 billion m3 of gas per year. The case of Kazakhstan, however, is somewhat different. Current production and its anticipated growth will mainly satisfy domestic demand. Kazakhstan is therefore now far behind Turkmenistan and Azerbaijan with respect to exports and probably will remain so.23
Baku-Tbilisi-Erzurum is also important for being the first gas pipeline between the Caspian Sea region and the West that lies outside of Russian territory. It is a political signal sent to Moscow by the former Soviet republics of Azerbaijan and Georgia that they are trying to escape Russian hegemony. However potentially important as Baku-Tbilisi-Erzurum may be for its connection to the planned gas pipeline Nabucco, the intake of gas from the Shah Deniz field in Azerbaijan does not necessarily mean complete independence from Russia. Through Gazprom, Russia is still maintaining considerable control over the extraction and transport of natural gas in the area. In the middle of 2009, a contract was signed between Gazprom and SOCAR on the export of gas under the auspices of the Russian company. This immediately stirred up discussion about whether under given conditions it makes any sense to be involved with the expensive Nabucco project, when the gas of the main potential supplier is under the control of Russia.24
Nabucco
Since 2002, one of the most carefully watched energy projects has been Nabucco, an effort to secure a regular supply of Caspian as well as possibly Middle Eastern natural gas for Central Europe that eliminates dependence on Russia. The roots of this project reach back into the 1990s, when Brussels began to consider establishing the South Gas Corridor for importing natural gas from the Caspian Sea and the Middle East across Turkish territory. The Nabucco project should connect the natural-gas reservoir in Erzurum, into which the BTE leads, with the town of Baumgarten an der March in eastern Austria, crossing Bulgaria, Romania and Hungary en route. Its planned length is 3,300 km, and the price has been set at 7.9 billion euros. It is estimated that the pipeline would transport a volume of 31 billion m3.25
The most visible result of eight years of negotiations has been the founding of Nabucco Gas Pipeline International GmbH. The shareholders, each with a 16.7 percent share, are RWE (Germany), project leader OMV (Austria), MOL (Hungary), Transgaz (Romania), Bulgargaz (Bulgaria) and BOTAŞ (Turkey). As of March 2010, all of the participating countries had ratified an accord to launch the project. In May 2011, however, the European Commission postponed the project for two years, so the gas pipeline is not to be turned on until 2017, with construction to begin four years earlier. The European commissioner for energy, Günther Oettinger, furthermore announced that the price of the project would probably climb to 15 billion euros, nearly double the original estimates.26
During the first years of operation of Nabucco, it is anticipated that it will be supplied with natural gas from the Shah-Deniz gas field in Azerbaijan, the second phase of which is actually to be completed in 2016-17. Turkmenistan, however, is supposed to play a key role in exploiting the complete capacity of Nabucco. The Caspian Energy Company (CEC) has already been founded by OMV and RWE, which together are conducting a survey of the planned pipeline across the Caspian Sea.27
The general problem with Nabucco, then, is that, unlike centralized imports from Russia, it would involve imports from several countries that would have to be strictly organized and coordinated. There has been talk of the possible connection of Iraq, Egypt and Iran, which would supply additional volumes of gas to Nabucco through Turkish territory. There are, however, no binding dates in place for this direction either. Meanwhile, as early as 2009 it seemed that the problem with filling the capacity of Nabucco had been halfway solved. This came about after the entry of OMV and POL into the natural-gas market in northern Iraq. It involved the Chor Mor and Chemchemal gas fields, which are under de facto Kurdish control. The central government in Bagdad did not, however, ratify the promised accord, as it did not take into consideration the stance of the central federation. Ankara coped with Bagdad's resistance with relatively little complaint, and Turkey has set its sights on promoting the Iranian option. It should be added that the Iraqi accord did not represent an ideal solution for Turkey either; it would provide a stable source of revenue to the government in northern Iraq, which barely conceals its sympathy for the separatist aspirations of Turkish Kurds.
A bit removed from the center of attention is the possibility of supplying Nabucco at least partially with the aid of the so-called Arab Gas Pipeline, which is currently connected to the infrastructure of Egypt, Jordan, Lebanon and Syria. Running from Arish, Egypt, to Homs, Syria, in its final phases it will be able to transport up to 10 billion m3 of gas per year. So far, this line serves only the Arab countries of the Near East and is greatly strengthening political and economic ties among the participating countries. But a scant 65 kilometers of pipeline from Aleppo, Syria, to Kilis, Turkey, will probably be finished in early 2012, representing the first attempt to connect the two countries, although it does not involve the expansion of the Arab Gas Pipeline.28
The recent Italian-Greek agreement on the building of an 807 km gas pipeline from the northern Greek town of Komotini to Otranto in eastern Italy, which should be functional in 2012, is viewed as a Nabucco branch line (it will likely transport near 8 billion m3 of natural gas towards the West). In 2007, a 293 km gas pipeline was built from Karacabey in Turkey to Komotini; in 2012, its capacity will be increased from the present 7 billion m3 to 12 billion m3.29 The branch in question has been dubbed the Turkey-Greece-Italy Interconnector and should connect the pipeline network in Erzurum with potential customers from Southern Europe.
Competition for Nabucco
The prospects for Nabucco are being complicated by Moscow's efforts to undermine the project. In recent years, Russia has been trying to improve the economic terms for the export of its own natural gas. It has started buying it from Azerbaijan — the volume of 1 billion m3 in 2010 doubled in 2011 (RIA Novosti, 2010).30 In an attempt to, among other things, devalue economically the TCGP Nabucco project and deepen Europe's dependence on supplies of Russian gas, Moscow is also accelerating the building of pipelines to the west and south. The recently finished Nord Stream is to transport nearly 55 billion m3 of natural gas annually to Northern Europe; Blue Stream, mentioned earlier, supplies the Turkish market. So far, however, it is unclear whether Blue Stream 2, promoted by Moscow, is planned as competition with Nabucco. In its current form, it is to lead from Samsun to Ceyhan with a subsequent connection to Syria, Lebanon and Cyprus.31 One may assume, however, that in the future it could be extended further towards the West as needed.
An enormous challenge for Nabucco is the construction South Stream, a pipeline controlled by Gazprom and the Italian concern ENI, each participating 50-50 in its construction. Recently, however, there has been talk of drawing the French energy company EDF and the German firm Wintershall, a subsidiary of BASF, into the project. EDF would obtain a 10 percent and Wintershall a 15 percent share at the expense of ENI, which would retain 25 percent.32 This pipeline, the construction of which runs along the floor of the Black Sea and is therefore encountering sharp criticism from environmentalists, is to supply natural gas from Russia (and Central Asia across Russian territory) to the very countries of east-central and southern Europe that are being targeted by the organizers of and participants in Nabucco: Bulgaria, Serbia, Croatia, Slovenia, Hungary, Austria, Greece and Italy. Construction of the pipeline has been variously estimated to cost from 10 to 24 billion euros; according to Gazprom, the price will be around 15 billion euros.33 The pipeline is to supply the region with an anticipated volume of 63 billion m3 of gas.
Apart from the reasons already stated, for several years Nabucco has also been held up by the unwillingness of the governments of Bulgaria, Austria and especially Hungary to give the project unambiguous support. It turns out that these countries are participating in both Nabucco and South Stream, although so far it is unclear what the timeline will be and what volumes of gas they will be pledging to purchase from which project. The fact that the transit and client states in question do not intend to enter into obligations has not helped to build optimism among investors with respect to Nabucco. While Russian energy companies operate as the extended grasp of the Kremlin and can rely on sufficient financing, political will and concentrated lobbying from the state in support of their projects, the proponents of Nabucco have nothing of the kind to speak of. There is continuing uncertainty in European capitals surrounding the controversial participation of Iran in the project, along with the absence of any legal obligation on the part of the Central Asian producers to supply gas to Nabucco. A real struggle is thus taking place over which of the competing projects will be finished earlier.34
CONCLUSION
Turkey has the potential to become an important (if by no means problem-free) country for the transit of energy raw materials from the Middle East and the Caspian Sea. Turkey itself is greatly interested in increasing and diversifying its supply of strategic resources, as its economy and its dependence on imported crude oil and natural gas have been undergoing unprecedented growth in recent years. Located at the crossroads of Europe, the Middle East and the Caspian Sea with their vast energy resources, Turkey has been striving since the 1990s to achieve standing as a Eurasian energy corridor. The fact that a nexus of pipelines might lead across Anatolia and connect South Caucasian (Azerbaijan, Georgia), Central Asian (Kazakhstan, Turkmenistan) and Middle Eastern (Iran, Iraq, Egypt) countries and Russia with the European continent would enhance Turkey's geopolitical role.
At the same time, however, it is clear that, in spite of all its efforts, Turkey remains just one of the players on the Eurasian energy field, not the key one. While all of the important transit projects that have been completed (BTC, JKR) or are expected to be completed in the foreseeable future (Nabucco) have been realized thanks to the support of Ankara, their success has been contingent above all upon lobbying by Washington or other countries. This involves not only purely economic questions, but also questions of a geopolitical nature relating primarily to the general attitude toward Russia.
The question of energy security is a highly politicized matter all over the world. Indicative of this is the lack of a uniform stance on the potential participation of Iran in regional energy projects. As it turns out, in the case of Nabucco, in which the participation of Tehran would be objectively desirable with respect to the diversification of sources of imported natural gas for EU countries, Ankara has so far had little success — mainly due to the negative stance of the United States. With its more open relationship with Iran, for example, as well as other Muslim countries, Turkey logically pays less heed to Europe, which has no intention of opening its doors to Iran. Unlike the rest of Europe, Ankara is making pragmatic use of its standing in the area and its potential for developing of political, economic and societal relations with an important nation.
It is furthermore necessary to take into account the often contradictory motives and activities of the individual powers. While the United States and the EU are trying to increase the diversification of energy sources for Europe and to emancipate the Caucasian republics from Moscow's sphere of influence, Russia itself is developing a whole range of activities of its own along these lines. Moscow's goal is to solidify its position in the area, to create a strategic partnership with Turkey and to hold on to its position as the key supplier of energy to Europe, securing for itself both profit and political influence over consumers.
However isolated and forgotten a player Iran may be in view of international sanctions, its own political system and its generally problematic international orientation, the country has considerable potential for influencing developments in the region and in European energy security. Although it is suffering from outdated drilling and transport infrastructure, the Islamic Republic cannot be overlooked, if only because it possesses the world's second-largest supply of natural gas. Also, in view of the fact that EU projects for bringing in gas by a southern route are being threatened by Russia's activities and the uncertain position of Azerbaijan and Turkmenistan, Iran currently represents the only real alternative for the diversification of supply.
Also contributing to this are Iran's efforts to make maximum use of its own mineral wealth to bolster its economy, now damaged by international sanctions. Mention should be made here in particular of the newly publicized plans for a new gas pipeline from Iran to Syria, where it would be joined with the Arab Gas Pipeline. This 2,000 km pipeline running across 900 km of Iraqi territory is supposed to empty into a Syrian-Venezuelan refinery in Alfrekls near Homs, in which Iran holds 26 percent ownership.35 Plans also call for connecting with Turkish infrastructure, which would further enhance existing links between the two countries. So far, they are connected only by the Tabriz-Ankara gas pipeline, but in July 2010, an agreement was signed between a Turkish company and the Iranian National Gas Company on the building of another pipeline within three years, with a capacity of around 20 billion m3 annually.36 Supplying Turkish infrastructure with gas from Iran is to be further augmented by the deepening of Iranian-Turkmen energy relations. In January 2010, the ceremonial opening took place of a 1,024 km pipeline from Dauletabad in Turkmenistan to an Iranian refinery in Khangiran, the annual capacity of which is 20 billion m3 of gas. There is, moreover, willingness on both sides for the further deepening of relations and for increasing export capacity from Turkmenistan to Iran.37 Such a trend could mean the creation of an alternative route to the planned Trans-Caspian Gas Pipeline, the realization of which is problematic, as noted earlier. In the case of the success of the projects in question and of the transport of raw materials by that route towards the West, Turkey's importance would only be enhanced.
To whatever extent Iran has represented an appropriate alternative, not only as a gas supplier for Europe, but also as a transit country for Turkmen gas, its participation is prevented at present by political impracticality. There is likewise a risk that even Iran could, over time, become dependent on the Russian Federation to a considerable extent, as Russian firms are now successfully investing upstream in Iran.38 The situation thus could be similar to the case of Azerbaijan, Turkmenistan and Kazakhstan, where Russia is effectively limiting or completely eliminating the ability of Europe to get an alternative source of gas independent of Moscow. The rapprochement between Russia and Iran can also be observed in their growing ties in the area of nuclear power and the supply of weapons. By their concerted efforts to isolate Iran, Europe and the United States may succeed in getting the Islamic Republic into an energy partnership with Russia. This, again, would thwart European diversification of resources, the main goal of which is to reduce their dependence on the Russian Federation.
Although the activities of Ankara in transporting of Caspian raw materials can be called generally successful, a number of potential risks cannot be overlooked. The consumption of natural gas in Turkey is rising constantly, but from a long-term perspective, it is risky to become excessively obligated to import such a huge quantity of gas from different (Russian, Iranian, Azerbaijani and possibly Turkmen) sources, which the country will be unable to consume by itself. Entering into ad hoc agreements to supply unused or extra gas to the West could be technically difficult because of the specific nature of trading in natural gas, and could be uncertain, in view of the South Stream and Nabucco pipelines that are already being built.
Another question is whether Turkey, in view of its increased importance as a transit country for natural gas to European markets, might become a "Ukraine of Asia Minor," using transit to its own advantage, for example, with respect to the EU, Russia or even Iran. From a current perspective, this might seem a rhetorical question, in view of the great dependence of East and Central Europe on supplies of natural gas from Russia, but clearly Brussels and European capitals should be considering this long-term potential development.
1 This paper has been written thanks to the research project of the Grant Agency of the Czech Republic GA407/07/1315.
2 For more details, see Tuncay Babali, "Turkey at the Energy Crossroads," The Middle East Quarterly 16, no. 2 (2009): 25-33.
3 "Reducing Turkey's Dependence on Foreign Oil and Gas," Oil & Gas IQPC, August 24, 2010, http://www.oilandgasiq.com/strategy-management-and-information/articles….
4 "The Perspectives of Azeri-Chirag-Guneshli," SOCAR News, June 12, 2009 (Currently unavailable in SOCAR archive).
5 Daily Mail Online, August 24, 2008.
6 International Energy Agency, World Energy Outlook 2010 (Paris: International Energy Agency, 2010): 499-500.
7 It is in connection with the BTC that negotiations have begun for a number of other projects for transit of crude oil and natural gas, which will be subjected to analysis below.
8 I.e., by the Gulf War of 1991, with the imposing of an embargo on Iraq in the 1990s, and by the tense relations between Ankara and the region of northern Iraq, de facto controlled since the 1990s by Kurdish separatists, etc.
9 Fatih Alimoglu, "Dogu Anadolu'daki Baris Yollari," Cumhuriyet, October 28, 2007.
10 Nihat Ali Ozcan, "Energy Security and the PKK Threat to the Baku-Tbilisi-Ceyhan Pipeline," Jamestown Terrorism Monitor 6, no. 18 (2008).
11 International Energy Agency, World Energy Outlook 2010, 465.
12 Ibid., 501.
13 U. S. Energy Information Administration, Azerbaijan – Oil, last updated November 2010, http://205.254.135.24/countries/cab.cfm?fips=AJ.
14 "Baku and Astana Close to Agreement over Trans-Caspian Transit?" Alexander Oil and Gas, May 9, 2010.
15 "Trans-Caspian Pipeline Reconsidered," Pipeline and Gas Journal, October 16, 2009.
16 It should be said here that, in the long term, transport by oil pipeline represents a much more stable means of transit than oil tankers, for which allowances must be made for delays depending on factors such as the weather.
17 "ENI Enters Caspian Politics," SOCAR News, June 12, 2009 (Currently unavailable in SOCAR archive).
18 Vladimir Socor, "Odessa-Brody Pipeline Operating on Azerbaijani Oil," Eurasia Daily Monitor 8, no. 59 (2011).
19 "Turkey's Growing Energy Demands," Alexander Gas and Oil, May 19, 2009.
20 Igor Torbakov, "Making Sense of the Current Phase of Turkish-Russian Relations," Jamestown Occasional Papers, October 2007.
21 "South Caucasus Pipeline Exports 1,3 Bn Cubic Meters of Gas," News.az, April 17, 2010., http://www.news.az/articles/13578.
22 "Georgian Oil and Gas Corporation, BP, and Statoil Reach an Agreement over BTE Transit Fees," Georgian Times, November 9, 2008.
23 International Energy Agency. World Energy Outlook 2010, 524-526.
24 Mahir Zeynalov, "Azerbaijan-Gazprom Agreement Puts Nabucco in Jeopardy," Today's Zaman (Istanbul), July 16, 2009, http://www.todayszaman.com/news-181072-105-azerbaijan-gazprom-agreement….
25 "Nabucco and Beyond," Agence France-Press, May 29, 2008.
26 Cat Contiguglia, "Nabucco Pipeline Delayed Again," Prague Post, May 18, 2011, http://www.praguepost.com/print/8738-nabucco-pipeline-delayed-again.html.
27 "OVE and RWE to Conduct Survey of the Caspian Seabed," RIAN.ru, June 8, 2010.
28 A. Akhundov,"Syrian Section of Kilis-Allepo Gas Pipeline Nearly Complete," Downstreamtoday.com, January 25, 2011, http://www.downstreamtoday.com/News/ArticlePrint.aspx?aid=25434&AspxAut….
29 "DEPA, TPAO Discuss Turkey-Greece Pipeline Extension," Turkish News, December 7, 2008.
30 Ilya Pitalev, "Gazprom to Increase Gas Purchases from Azerbaijan to 2 Bcm in 2011," RIA Novosti, January 21, 2010, http://en.rian.ru/business/20100121/157637562.html.
31 "Russia's Blue Streem to Reach Syria and Lebanon," PipelinesInternational.com, June 16, 2010.
32 "Gazprom, Srbijagas Strike Action Plan on South Stream in Serbia," Novinite.com (Sofia), May 27, 2011, http://www.novinite.com/view_news.php?id=128660.
33 "Gazprom Says South Stream to Cost EUR 15.5 bn," EUbusiness.com, November 30, 2010, http://www.eubusiness.com/news-eu/russia-energy-gas.7dq/.
34 Interestingly, in the case of South Stream, Moscow is vehemently ignoring arguments of a similar type.
35 "Iraq, Syria Eager for Cooperation with Iran in Building Joint Gas Pipeline," Fars News Agency, April 28, 2011, http://english.farsnews.com/newstext.php?nn=9002080347.
36 "Iran and Turkey Sign Pipeline Deal," Al Jazeera, July 23, 2010, http://english.aljazeera.net/business/2010/07/201072314455840549.html.
37 "Iran, Turkmenistan Discuss Gas Cooperation," Fars News Agency, April 27, 2011, http://english.farsnews.com/newstext.php?nn=9002076738.
38 It is not without interest that Vladimir Putin has prioritized realization of the South Stream project over the North Stream project. RIA Novosti, July 29, 2009.
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