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By Gulgiz Dadashova

Analysts warn Europe might face roadblocks from Moscow after official statements favouring Caspian gas were issued. Europe's aspiration of independence from Russian supplies aims to score long-term political commitment. The Russian-favored Turkish Stream is joining the race to bring gas to Europe introduced many new challenges in this regard.

Europe and emerging realities

Recent developments show that all steps taken to realise the blue energy routes from the Caspian basin in the direction of Europe may shake up existing plans. The Ukraine crisis was indeed a wake-up call that has raised awareness to the importance of an energy security strategy for the EU.

Brussels recogniSed the importance of diversification and said it would be targeting Algeria, Turkey, Azerbaijan, Turkmenistan, the Middle East, Africa and other potential suppliers to ensure its energy security.

Russia and new routes

The European Union believes the launch of the Southern Gas Corridor is a milestone for reducing the energy dependence on one source and with Moscow’s cancellation of the South Stream Europe will make its position even stronger.

The failure of the South Stream gas pipeline significantly broke Russia’s reputation as a reliable partner and pushed Europe to seek alternative supply sources, hereby putting Turkmenistan with other Caspian states in the most benefiting position.

Brussels has repeatedly voiced its pleasure with having non-Russian gas routes for energy-hungry Europe. The point is that Russia will hardly stand idly as an observer while its strongest leverage loses position and will never welcome such huge volumes of gas entering Europe so easily.

Despite Europe’s efforts to bring Turkmen gas to its market, nothing concrete has been achieved yet to get this gas across the Caspian Sea.

“Azerbaijan has the commercial interest as does Turkmenistan and others, but they are all vulnerable to Russian pressure,” believes Dimitar Bechev, the senior visiting fellow at LSEE Research on South Eastern Europe. “Moscow can live with the Southern Gas Corridor in its present shape but if the stakes go up it'll take a tougher approach.” Speaking about numerous challenges to Turkmenistan’s joining the European gas race and Moscow’s possible counter moves, Bechev said pressure should be expected. “I am sure there will be pressure - Caspian delimitation, Turkmen in big Russian cities, Turkmen leadership assets. Also positive incentives - better price for Turkmen gas which Gazprom gets at fire-sale levels,” he wrote in an e-mail to AzerNews.

Amanda Paul, the policy analyst at the European Policy Centre in Brussels also shares the view saying that the Turkmen are very careful in terms of their foreign policy moves, including on energy. “It is clear that Russia would not like to see Turkmenistan sell huge amounts of gas to Europe. But this is far from being realised anyway, not least, because it is not clear which route would take the gas to hook up to the Southern Gas Corridor.

The Turkmens prefer to play a waiting game - they wait until all the necessary infrastructure is in place and operational, when gas is flowing from other sources. I do not think we should overestimate what would be Russia’s “counter move” if Turkmen gas is eventually sold. Azerbaijan has already achieved this as Baku broke Russia’s hold on pipes going to the West when the BTC pipe was inaugurated. It’s not always easy to do this but ultimately sovereign states should be allowed to pursue their own interests,” she added.

Continuing to Turkey

The increased Russian involvement in energy supplies has always been a threat for Europe in case of a real conflict. With the blowing of cold winds in its relations with the West and Europe’s turning to other Caspian states for gas, Russia has been forced to change its pivot to Turkey and economically weaker European counties.

Eurasia energy observer, Andrej Tibold, believes that Russia will not accept failure with the Turkish Stream since it has already invested a lot in creating its own infrastructure for the South Stream. Experts warn that the possibility of a strong Ankara-Moscow alliance with supportive Middle East countries can end in energy catastrophe for Europe.

Turkey, with its rush to benefit its quite beneficial geo-position and good ties with the energy rich Azerbaijan and Turkmenistan, has emerged as a key player in negotiations between energy sources and main consumers. Turkey is the key country to bring Azerbaijani, Iranian, or Turkmen gas to Europe. As the country holds leverage in pipeline policy after Moscow instituted to build Turkish Stream, a South Stream alternative under the Black Sea to Turkey, Europe’s energy choice may also affect Ankara’s EU membership aspiration.

Amanda Paul also notes that the biggest winner from Turkish Stream will probably be Ankara as it will take Turkey nearer to its dream of being an energy hub as well as the face that the Russians will sell their gas at a lower rather than they have done hitherto. “However, despite the fact that Turkey is increasingly important for the EU in energy security terms, this does not mean it will make Turkish accession to the EU any easier. There still remains strong opposition to Turkish membership and I expect it to stay that way for the time being,” she stressed.

Another concern is Iran

Tehran, which is trying to get into the European gas market, has long been signaling to European customers, suppliers in the Caspian Basin, and transit country Turkey that Iran is ready to get into the gas game. Regarding a possible Iranian gas supply toward Europe, Bechev said Iran seems close to a nuclear deal but that he would be cautious about its prospects as a gas exporter.

“Domestic demand there sucks up all extracted gas and dispute-ridden Iranian-Turkish trade in gas has shown Tehran is far from a reliable supplier. It all depends on whether the political opening brings in foreign investment to tap into new fields - but then again energy firms have to factor in political risk and plunging gas prices in the short and medium term," Andrej Tibold wrote.

Iran, with the second-largest gas reserves in the world, is well-placed to sell gas to Europe but that will be a complicated process, as the country still could not agree with the West over its nuclear issue.

Amanda Paul, for her part, believes a deal with Iran will change the face of the entire region and Iran would once again be able to play a full regional and global role including related to its energy policy. “However, after so many years of isolation due to sanctions, Iran’s gas infrastructure is not in good shape and would require huge investments which could take several years. Furthermore it is likely that resurrecting the oil industry may take precedence over gas. However, ultimately Iran could be a source for the Southern Gas Corridor,” she stressed.

Spots on Azerbaijan

The spotlight in energy games in the next few years will most certainly be on Baku with its friendly ties with all the involved parties. The country will play a significant role in the coming period in shaping of the EU gas supplies aiming to decrease dependence on Gazprom.

Paul notes that the point is to reduce the amount of gas the EU currently gets from Russia by achieving the maximum routes and sources.

The expert said the Southern Gas Corridor is a top priority for the EU in terms of its energy diversification plans. “So far Azerbaijan is the only country that has committed gas to the SGC although it is hoped that more will follow. At this point the most important thing is bringing the corridor to life and that is what Azerbaijan is doing, bringing it to life,” she wrote in an e-mail to AzerNews.

“The ultimate goal would be for each EU member state to have two pipelines for two different sources of gas,” she noted.

Changes in the market indeed requires sound decisions that will determine who remains in the big energy game, but will ultimately trigger interests of all sides involved. New energy supplies can only be secured if Europe speaks with one voice and stands strong by geopolitical power players.

The article was initially published on New Eastern Europe.

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