Russia plans to inspire rivals

Jul 06, 2007 02:00 AM

by James G. Neuger

Plans for a natural gas pipeline across the Black Sea by Gazprom of Russia and ENI of Italy were adding to pressure on a US-backed group to complete a rival project in southern Europe, an official with the US State Department said.
Gazprom, the Russian gas monopoly, and ENI would compete against a planned Turkey-to-Austria pipeline backed by the United States and European Union as a way of pumping central Asian gas to Europe without going through Russia.

The US deputy assistant secretary of state, Matthew Bryza, said the announcement in June of the Russian-Italian venture could inspire countries along the southern corridor to move ahead quickly to build the pipeline.
“The urgency of this latest development maybe will spur the countries and companies to say: Enough, it’s time to show our cards to each other and get on with the transit agreements and the other legal agreements,” Bryza said during a NATO conference in Ohrid, Macedonia.

The pipeline diplomacy comes as the North Atlantic Treaty Organization (NATO) and European Union countries search for ways to enhance their energy security, with President Vladimir Putin of Russia asserting greater control over Russian oil and gas resources.
Gazprom and ENI plan to spend EUR 10 bn, or $ 13.4 bn, to build a 900-km, or 560-mile, link under the Black Sea that would compete against the EUR 5 bn project, known as Nabucco, favoured by Washington. Stretching 3,300 km, the Nabucco line would tap into the same gas fields in Kazakhstan and Turkmenistan that the Russian-Italian venture was eyeing. Nabucco is led by OMV of Austria, with partners including BOTAS of Turkey, Bulgargaz of Bulgaria, MOL of Hungary and Transgaz of Romania.

Speaking of the effect of the Gazprom-ENI pact on Nabucco, Bryza said, “I just hope it will become a catalyst for the various parties to say: You know what we need to overcome our self-doubt, our doubt of the other side and reach these agreements.”
Bryza said it was unclear how well Gazprom and ENI would manage to pull off “a really expensive project” that would need to look elsewhere for gas once the Siberian fields are exhausted.

The United States was not looking to block the Russian-Italian project, Bryza said, which would add a Balkan link to a web of Russian pipelines that already supplied a quarter of natural gas for the European Union.
“We’ve never tried to frustrate any pipeline projects in Europe,” Bryza said. “We don’t see a zero-sum game. If we were playing a zero-sum game, we would try to block those alternative pipelines. We don’t.”

Russia has flexed its energy muscles by halting supplies of gas and oil to Europe twice in the past two years, in disputes with Belarus about crude oil at the start of 2008 and with Ukraine about gas in 2007.
At the NATO conference, alliance leaders took the first steps toward sketching out an energy security strategy in response to appeals by former Soviet-dominated countries like Poland and Lithuania.

Source: The St Petersburg Times
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