The pol­i­tics and eco­nom­ics of gas in the MoscowAnkara-Brus­sels tri­an­gle


Po­lit­i­cal ten­sions and eco­nomic crises have brought about new de­vel­op­ments in gas pipe­line strate­gies. South Stream is dead, but a new pos­si­bil­ity -- Turk­ish Stream -- is now a re­al­ity de­spite sig­nif­i­cant po­lit­i­cal chal­lenges. This project has drawn ob­jec­tions from Brus­sels, and Ankara re­cently also be­come quite skep­ti­cal. How­ever, even with th­ese chal­lenges, the project -- in its re­stricted ver­sion -- is likely to go ahead de­spite an­nounced de­lays In the mid-2000s, Rus­sia be­gan re­con­sid­er­ing its en­ergy pric­ing and trans­porta­tion pol­icy in the former Soviet space. The Com­mon­wealth of In­de­pen­dent States (CIS) sum­mit in Kazan, Rus­sia, in 2005 was an im­por­tant turn­ing point. Moscow made a strate­gic de­ci­sion to switch to more “prag­matic” mar­ket-based en­ergy re­la­tions with its neigh­bors, deny­ing sub­si­dized en­ergy prices to gov­ern­ments it deemed “dis­loyal” to Rus­sia. An­other im­por­tant change -- known as the “strat­egy of tran­sit avoid­ance” -- was im­ple­mented in or­der to di­rectly link Rus­sian en­ergy hubs and Moscow’s ma­jor clients in Europe, by­pass­ing tran­sit coun­tries. The vol­ume of oil in tran­sit was sig­nif­i­cantly re­duced af­ter the con­struc­tion of the two lines of the Baltic Pipe­line Sys­tem (BPS), al­low­ing Siberian oil to be shipped di­rectly from Rus­sia’s ports in the Baltic to cus­tomers in Europe.

A re­duc­tion in the amount of gas de­liv­ered via Ukraine has also be­come an is­sue of strate­gic im­por­tance for the Rus­sian lead­er­ship, which con­sid­ers Ukraine’s gas trans­mis­sion sys­tem the weak­est link of Gazprom’s gas sup­ply chain and also re­gards the coun­try as an un­re­li­able tran­sit part­ner. Speak­ing on April 13, 2015, in Ber­lin at the “Europe and Eura­sia: To­wards the New Model of En­ergy Se­cu­rity” con­fer­ence, Rus­sian en­ergy gi­ant Gazprom’s CEO, Alexei Miller, said, “Ukraine’s gas trans­mis­sion net­work -- used as a ma­nip­u­la­tion tool -- has ex­plo­sive con­fronta­tional po­ten­tial.”

A num­ber of pipe­lines avoid­ing Ukrainian ter­ri­tory have been built since 2003. The Blue Stream -- a ma­jor trans-Black Sea gas pipe­line with a trans­porta­tion ca­pac­ity of up to 16 bil­lion cu­bic me­ters (bcm) per year -- has been car­ry­ing Gazprom’s “blue fuel” from Rus­sia to Turkey since Novem­ber 2005. Rus­sia has also built the tran­sBaltic Nord Stream pipe­line. The first line of the Nord Stream pipe­line was in­au­gu­rated in Novem­ber 2011 and the sec­ond in Oc­to­ber 2012. This off­shore trans-Baltic gas pipe­line link­ing Rus­sia and Ger­many has al­lowed Gazprom to sig­nif­i­cantly re­duce its tran­sit via Ukraine.

In 2013, Gazprom set a post-2008 record in gas de­liv­er­ies; the to­tal vol­ume of nat­u­ral gas sup­plied

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