The Nabucco Pipeline: Turkey, Russia and Petro-politics

Ankara, Turkey, 5 August 2009. The Nabucco pipeline is supposed to free much of Europe and Central Asia from their dependency on Russia for energy, but it is also fast becoming a pivot point for negotiations in Ankara’s aspirations.

Turkey has never been fully European or fully Asian – always straddling the two continents and sharing both sides- political, religious, and cultural characteristics.[br]

Ankara, Turkey, 5 August 2009. The Nabucco pipeline is supposed to free much of Europe and Central Asia from their dependency on Russia for energy, but it is also fast becoming a pivot point for negotiations in Ankara’s aspirations.

Turkey has never been fully European or fully Asian – always straddling the two continents and sharing both sides- political, religious, and cultural characteristics.[br]

Its moderate Islamic government and heritage ally it nicely with its eastern neighbors, but are not too extreme for the secular Europeans to the west. Geographically, it forms a natural bridge between Eastern Europe and the oil and gas rich Caspian area.

As such, Turkey is in a key position to bypass Russia and pipe oil and gas to Europe. Indeed, this is something it has already done with the recent completion of the BTC (Baku-Tbilisi-Ceyhan) pipeline.

Almost exactly a year ago, BTC was bombed by Russia after the conflict in Georgia. We reported this in Energy: Russia, Georgia and Azerbaijan – Linked and Divided by Oil Pipelines.

So Turkey has already built such a pipeline, and apparently has reaped the benefits. Now it wants another pipeline – but not before it can exercise its power in the region.

Nabucco is worth a massive $10.3 billion. (BTC was ‘only’ $3.8 billion). It will employ tens of thousands in a vast range of industries, from the obvious contractors and gas consultants, all the way down to the farmers and tiny shop owners in the areas the pipeline will be built.[br]

These jobs would be nice, but they are nothing compared to the 31 billion cubic metres of gas it could deliver to the West per year. This dwarfs BTC – it only sends 360 million barrels of oil and 300 million cubic metres of gas to Europe. And when it was built, it was huge. Nabucco is colossal.

In the middle of July, a ceremonial agreement was signed to initiate the project. Leaders from Turkey, the US, Iraq, Germany, Syria, Egypt, Bulgaria, Romania, Hungary, and Austria met in Ankara to pen the deal.

So everybody, except maybe Russia, wants the pipeline to happen. Russia can’t hold oil and gas ransom from the west anymore (at least not as much) and Turkey can profess its critical role to the world, and hopefully join the EU.

Nabucco would even be an energy lifeline linking the massive Iranian and Iraqi gas reserves to Europe. Turkey could become a key negotiator between these nations, so for obvious reasons everyone wants Ankara on its side.

Turkey has already started flexing its muscles. This Ankara signing was delayed numerous times. First, it was to happen in April, then June. Ankara was considering a similar offer from Russia. Though imagine the power Turkey could wield if it had a Russian and an Azeri-Georgian (BTC) pipeline monopoly…

The delay in the Nabucco signing could have led to Turkey negotiating a stronger deal from the European partners. It certainly made the Europeans nervous.

While this power may not lead to Turkey being accepted into the EU, it does strengthen its position on both continents, and it makes itself critical to all, from Iran to the US.

Juan Abdel Nasser, EconomyWatch.com