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Floating Alternative to Nabucco Pipeline Materializes

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Floating Alternative to Nabucco Pipeline Materializes

Unread postby Oilguy » Thu 30 Sep 2010, 13:21:23

The “floating alternative to the US-sponsored Nabucco” pipeline network to bring Central Asian gas supplies to Europe and the Mediterranean has begun to materialize, further transforming or limiting the prospects for the Nabucco project which has been emerging as an expensive option led by the US strategy to bring Turkey into the European mainstream.

See: Defense & Foreign Affairs Special Analysis, April 6, 2010: A Floating Alternative to Nabucco Undercuts Potential Disruptions to EU Energy Supplies and Reduces Turkish Leverage Potential Against the EU.

The EU website Euractive reported on September 20, 2010: “Two EU members, Romania and Hungary, have joined forces with Azerbaijan and Georgia around a project to ship liquefied Azeri gas to their region. Supporters argue that the project could be implemented quickly, but critics point to high costs and vulnerability.”

Defense & Foreign Affairs, in an April 6, 2010, report entitled “A Floating Alternative to Nabucco Undercuts Potential Disruptions to EU Energy Supplies and Reduces Turkish Leverage Potential Against the EU,” noted: “In late February 2010, Romania, Azerbaijan, and Georgia finalized an agreement on the direct export of Azerbaijani natural gas to Romania. This has profound ramifications for halting Turkey’s ability to hold the EU hostage to energy supplies via Turkey, and offers far more rapid easing of European energy pressures.”

The September 20, 2010, report highlighted the fact that the new network had, indeed, been implemented rapidly. The state-owned energy companies from Azerbaijan, Georgia and Romania on September 14, 2010, signed a memorandum of understanding in Baku, Azerbaijan, to launch the Azerbaijan-Georgia-Romania Interconnector (AGRI) project, and a new company was created with the initial task of undertaking a feasibility study and raising funds. This was followed by what was called “the AGRI Summit” in which Azerbaijan Pres. Ilham Aliyev, Georgian Pres. Mikhail Saakashvili, Romanian Pres. Traian Basescu, and Hungarian Prime Minister Viktor Orban participated.

On September 20, 2010, Hungary announced it could become a shareholder in AGRI, giving each country would hold a 25 percent stake in the project. As the April 6, 2010, Defense & Foreign Affairs report noted, AGRI was designed to transport Azerbaijani gas by pipeline to the SOCAR-owned Kulevi terminal on the Georgian coast of the Black Sea, where a liquefaction plant has been planned to be built. From there, liquefied gas will be shipped across the Black Sea by tankers to new terminals in the Romanian port of Constanta.

From Constanta, the gas will be distributed through the Romanian pipeline system. From there, the gas will be pumped to Hungary and on to the rest of the European market.

The new system maximizes, insofar as possible, the independence of Azerbaijan and Georgia from both Russian and Turkish (and also US) pressures, giving both states a modicum of recovery from the position they faced in August 2008. The US-backed Georgian bid to militarily seize control of the enclaves of Abkhazia and South Ossetia failed, and, with that, the US ability to support and influence the region — particularly Turkey, Azerbaijan, Georgia, and Ukraine — essentially disappeared.

See: Defense & Foreign Affairs Special Analysis, September 23, 2008: “A New Strategic Framework Emerges Gradually, Post-Georgia, in European, Russian, and Central Asian Energy, Marginalizing the US.”

The AGRI option also allows Azerbaijan, a Turkic state, to build a slight measure of independence from its historically key regional partner, Turkey, given that the Islamist leadership of Turkey has now opened a significant — albeit rocky — dialog, at Russia’s insistence, with Iran, which works with Armenia to present as Azerbaijan’s major potential security threat.

Moreover, although Azerbaijan and Georgia need to have options for the transportation and sale of gas (in particular) which are not directly controlled by Moscow, both states have begun developing a more stable modus vivendi directly with Russia. The European Union, too, gains from having a new delivery route for Central Asian energy.
Full article: http://www.globalintelligencereport.com ... y-Supplies
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