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24th April 2010, 10:11 AM
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Recently discussed some aspects here.
Greater Khazar Empire.
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High-stakes Eurasian Chess Game: Russia’s New Geopolitical Energy Calculus
Tectonic Shift in Heartland Power: Part II
by F. William Engdahl
Notes and links at original article.
http://globalresearch.ca/index.php?context=va&aid=18129
Russia’s North-South-East-West energy strategy
The defusing of major Washington military threats is far from the only gain for Moscow in having a neutral but stable Ukrainian neighbor. Russia now vastly improves its ability to expand the one great power lever it has, outside of its remaining and still formidable nuclear strike force. That lever is to counter Washington’s relentless mililtary pressure by cleverly using export of the world’s largest reserves of natural gas, a fuel much in demand in Western Europe and even in UK where North Sea fields are in decline.
According to west European industry estimates, demand within the European Union countries for natural gas, especially for use in electric power generation where it is seen as a clean and very efficient fuel, is estimated to rise some 40% from today’s levels over the next twenty years. That increase in gas demand will coincide with a decline in current gas output from fields in the UK, Netherlands and elsewhere in the EU. [1] With Ukraine’s shift from hostile opposition to Moscow to what Yanukovych terms ‘non-aligned’ neutrality -- with an early emphasis on stabilizing Russian-Ukrainian gas geopolitics -- Moscow suddenly holds a far stronger array of economic options with which to neutralize Washington’s game of military and economic encirclement.
When Yushchenko and Georgia's Saakashvili took the reins of power in their respective countries and began taking steps with Washington to join NATO, one of the few means available for Putin’s Russia to re-establish some semblance of economic security was its energy card. Russia has by far the world's largest known reserves of natural gas. Interestingly, according to US Department of Energy estimates, the second largest gas reserves are in Iran, a country also high on Washington's target list.[2]
Today, Russia is clearly pursuing a fascinating, highly complex multi-pronged energy strategy. In effect it is using its energy as a diplomatic and political lever to ‘win friends and influence (EU) people.’ Putin’s successor as President, Dmitry Medvedev, is well suited to the role of overseeing gas pipeline geopolitics. Before becoming Russian President, he had been chairman of the state-owned Gazprom.
High-stakes Eurasian chess game
In a sense, the Eurasian land area today resembles a geopolitical game of three-dimensional chess between Russia, the European Union member countries, and Washington. The stakes of the game are a matter of life and death for Russia as a functioning nation, something clearly Medvedev and Putin well realize at this point.
US attempts at the military encirclement of Russia included not only the Rose and Orange Revolutions in 2003 and 2004, but also the highly provocative Pentagon missile ‘defense’ policy of placing US-controlled (not NATO-controlled) missiles in key former Warsaw Pact countries on Russia’s direct perimeter. As a result, Moscow has developed a remarkable and complex energy pipeline strategy to undercut a clearly hostile US military strategy that has used NATO encirclement, missile deployments, and ‘color revolutions,’ including the attempted destabilization of Iran during summer 2009 with a ‘Green Revolution’ or what Hillary Clinton flippantly dubbed the ‘Twitter Revolution.’ All of these US moves have attempted to isolate Russia and weaken her potential strategic allies across Eurasia.
For Russia, which recently surpassed Saudi Arabia as the world’s largest oil producer and exporter, sales of its natural gas abroad has a significant advantage in that Moscow is better able to control the price and market of gas. Unlike oil, whose price is tightly controlled by a cartel of Big Oil (and their Wall Street co-conspirators such as Goldman Sachs, Morgn Stanley, JP MorganChase), natural gas is far more difficult for Wall Street to manipulate on a short-term speculative basis as with oil.
Because gas, unlike oil, is dependent on construction of costly pipelines or LNG tankers and LNG port terminals, it tends to have a price fixed by bilateral long-term agreements between buyer and seller. That gives Moscow a degree of protection against events such as the brazen Wall Street manipulation of oil prices in 2008-2009 from a record high of $147 a barrel down to below $30 only months later, manipulations which devastated Moscow’s oil earnings at just the time the global financial crisis cut off credit to Russian banks and companies.
With Yanukovych now President in Ukraine, the way appears clear for a rational gas supply and transit contract from Russia’s Gazprom to and through Ukraine, and continuing on to western Europe. Fully half of Ukraine’s domestic energy comes from natural gas and the overwhelming bulk of that gas, some 75%, comes from Russia. [3]
At this point it seems a stable settlement has been reached between the Russian and Ukrainian governments on pricing for imported Russian gas. As of January 2010 Ukraine has agreed to pay prices close to western European levels for its gas, and at the same time she will get significantly higher transit fees from Russia’s state-owned Gazprom for transporting Russian gas through to western Europe. Some 80% of Russian gas exports went through Ukraine up until now. [4]
That’s about to change dramatically however, with the implementation of Russia’s long-term pipeline strategy, a strategy designed to make Russia less vulnerable to future political shifts such as the 2004 Ukraine Orange Revolution.
http://www.globalresearch.ca/articlePictures/engdahl2.JPG
After the 2004 Ukraine Orange Revolution, Moscow’s western pipeline strategy until now has been to bypass both Ukraine and Poland through construction of an underwater gas pipeline, Nord Stream, running from Russia directly to Germany. Poland’s Foreign Minister Radek Sikorski is a Washington trained neo-conservative . As the previous Defense Minister, he played a central role in Poland’s missile defense agreement with Washington. Sikorski’s Poland today is bound closely to NATO, including agreeing to Washington’s militarily provocative missile deployment policies, and he is trying at every turn, so far unsuccessfully, to block construction of Nord Stream.
Nord Stream was especially vital for Russia when it looked possible that Washington might succeed in pulling Ukraine into NATO after the Orange Revolution. Today the alternative Baltic Sea pipeline assumes a different importance for Russia.
The Nord Stream gas pipeline from Russia’s port of Vyborg near St. Petersburg to Greifswald in northern Germany, goes beneath the Baltic Sea in international waters, completely bypassing both Ukraine and Poland. When Nord Stream was announced as a joint venture between two major German gas companies, E.ON and BASF with Russia’s Gazprom, and with former German Chancellor Gerhard Schroeder as board member, Sikorski, then Poland's Defense Minister, compared the German-Russian gas deal to the Molotov-Ribbentrop pact -- the 1939 pact between Nazi Germany and the Soviet Union which divided Poland between the two. [5] Sikorski’s logic was not so precise but his emotional imagery was.
In late 2009 Sweden and Finland joined Denmark in finally granting passage rights through their portion of the Baltic Sea for the pipeline. Construction of the multi-billion dollar project is due to begin this April and gas deliveries are to begin in 2011. When a second parallel pipeline, due to start construction in 2011, is completed, Nord Stream anticipates a full capacity of 55 billion cubic meters of gas a year, enough to fuel 25 million households in Europe, according to the Nord Stream website.
With Nord Stream’s primary gas route directly from Russia to its major clients in Germany, along with a stable transit agreement through Ukraine, the likelihood of a disrupted supply of Gazprom deliveries to northern Europe becomes remote. Nord Stream will allow Moscow’s Gazprom to use a more flexible gas diplomacy and to greatly lessen future vulnerability to transit country supply disruptions such as it has had in recent years from a hostile Ukraine.
At the end of 2009 in Minsk, just as Nord Stream was clearing the final political hurdles, Russian President Dmitry Medvedev met with Belarus officials. Medvedev said that Russia was considering a second leg of its large Yamal-Europe gas pipeline through Belarus if future demand from western Europe warranted, stating, “I think the more possibilities there are for Russian gas supplies to Europe, the better it will be for both Europe and Russia.†[6]
In addition, in a notable geopolitical shift, the UK has just signed a long-term contract with Gazprom to import gas via the Nord Stream to meet more than 4% of UK gas demand by 2012, as Britain shifts from being a gas exporter to a gas importer.[7] Presently, in addition to the UK and Germany, Gazprom now has contracts to supply Denmark, The Netherlands, Belgium and France, making it a major new factor on the EU energy supply market.
South Stream strategy
Meanwhile, Washington, bitterly opposed to Nord Stream, attempted unsuccessfully to block it by proxy through back-door support for Poland and other EU opposition.
In a second major front in what could be called the Russia-USA pipeline wars, the US has initiated competing proposals to build gas pipelines to serve the countries of southern and southeastern Europe. Here Washington is openly backing what is called the Nabucco pipeline project. Moscow is promoting what it calls its South Stream project, the southern Eurasian sister to the Nord Stream in the north of Europe.
On December 12, 2009 the government of Bulgaria, a former Warsaw Pact member now in NATO and the EU, announced that it would participate in Moscow’s South Stream project despite considerable pressure from Washington.
In June 2007, Gazprom and Italy’s ENI concern signed a Memorandum of Understanding for the South Stream project to design, finance, construct and manage the South Stream. ENI, Italy’s largest industrial company, created in the 1950’s by Italy’s legendary Enrico Mattei, is also partly state-owned and has been involved in the Russian gas business since the early 1970’s.
South Stream’s offshore section is to run under the Black Sea from the Russian coast to the Bulgarian coast, a length of around 550 miles at a maximum depth over two kilometers and have a full capacity of 63 billion cubic meters, even larger than Nord Stream.
From Bulgaria, South Stream will split into two arms, the northern section stretching to Romania, Hungary, the Czech Republic and Austria and the southern arm going through Bulgaria to southern Italy. The new pipeline is expected to become operational in 2013.
Gazprom has an agreement to provide Italy with gas until 2035 and South Stream will be the main vehicle for that. South Stream AG, the 50-50 Gazprom-ENI joint venture is registered in Switzerland. To date Gazprom has signed transit agreements for the pipeline with the Republic of Serbia and Greece and Hungary. [8] In January 2008, Gazprom bought 51% of the Serbian state oil monopoly NIS to secure its presence there.
An indication of the pressure that Washington has put on Bulgaria over its participation in Russia’s South Stream is that Bulgaria also signed up to take part in the Nabucco project in December 2009. Commenting on the dual signings, Bulgaria’s Prime Minister Boyko Borisov told the press, “Nabucco is a priority of the European Union while the Russian South Stream is moving forward very quickly and many European countries are joining it almost daily.†[9]
On March 3, 2010 the new Croatian government of Prime Minister Jadranka Kosor signed an agreement in Moscow with Russian Prime Minister Vladimir Putin allowing the pipeline to pass through Croatian territory, setting up a 50-50 joint venture to realize the construction.
Kosor said that the agreement ‘On the Construction and Exploitation of a Gas Pipeline on Croatian Territory’ creates a legal basis for Croatia's involvement in South Stream, allowing the parties to set up a 50/50 joint venture. Two days later, in what seemed a snowballing enthusiasm for Gazprom’s project, the Bosnian Serb Republic announced that it, too, will join the South Stream gas pipeline project. It proposes to build a 480 km pipeline in northern Bosnia and link it to the South Stream pipeline, bringing the total number of participating countries that have signed deals with Gazprom to seven. [10]
In addition to Serb Bosnia, Gazprom’s partners now include Bulgaria, Hungary, Greece, Serbia, Croatia and Slovenia. It almost retraces the Balkan route of the controversial Berlin-to-Baghdad railway which played such a decisive geopolitical role in British machinations that ultimately led to World War I following the assassination of the Austro-Hungarian heir to the throne, Archduke Francis Ferdinand.[11]
The central issue for the two competing pipeline projects, South Stream and Nabucco, is not who will buy their gas. As noted, natural gas demand across Europe is expected to rise dramatically in coming years. Rather it’s the question of where the gas will come from to fill the pipeline. Here Moscow now clearly holds the trump cards.
In addition to gas directly from Russia’s gas fields, a major component of South Stream gas is to come from Turkmenistan and from Azerbaijan and possibly at some point from Iran. In December 2009 Russian President Dmitry Medvedev went to Turkmenistan to sign major agreements on energy cooperation.
Until the breakup of the Soviet Union in 1991, Turkmenistan was a republic of the Soviet Union, the Turkmen Soviet Socialist Republic, Turkmen SSR. It is bordered by Afghanistan to the southeast, Iran to the south and southwest, Uzbekistan to the east and northeast, Kazakhstan to the north and northwest and the Caspian Sea to the west. Russia’s Gazprom until now has been the dominant economic partner of the country, which has newly confirmed huge gas reserves. Turkmen gas has been vital for the supply chain of Gazprom and dates back to the era when Turkmenistan was an integral part of the Soviet Union and the Soviet economic infrastructure.
When ’President for Life,’ Saparmurat Niyazov, known as ‘Türkmenbaşy’ or ‘leader of the Turkmens,’ died unexpectedly in December 2006, Washington began entertaining hopes of weaning the new President, Gurbanguly Berdimuhamedow, away from Russia and into the US orbit. To date they have met with little success.
The Medvedev-Berdimuhamedow December agreements included new agreements for Turkmen long-term gas supplies to Gazprom which will fill the South Stream pipeline either directly or by replacing Russian gas to the same -- meaning Nabucco is left out in the cold there.
Nabucco high and dry...
The active pipeline diplomacy of Russia and Gazprom in recent months has dealt a devastating blow to Washington’s favored alternative, Nabucco, which is planned to run from the Caspian region and Middle East via Turkey, Bulgaria, Romania, Hungary with Austria and further on to Central and Western European gas markets, some 3,300 km, starting at the Georgian-Turkish and/or Iranian-Turkish border. End station would be Baumgarten in Austria. The project is parallel to the existing US-backed Baku-Tbilisi-Erzurum oil pipeline and could transport 20 billion cubic meters of gas a year. Two-thirds of the pipeline would pass through Turkish territory.
Following a two day visit to Ankara in April 2009, US President Obama appeared to have won a major victory for Nabucco when Turkey’s President Erdogan agreed to sign on to the project in July 2009, after several years of delay. Nabucco is an integral part of a US strategy of total energy control over both the EU and all Eurasia. It explicitly has been conceived to run entirely independent of Russian territory and is aimed at weakening the energy ties between Russia and Western Europe. Those energy ties were considered a significant reason why the German government along with France refused to back Washington’s push to bring Ukraine and Georgia into NATO.
Today the future of Nabucco is in grave doubt. The problem is that Russia’s Gazprom has all but locked up long-term gas contracts with all the potential suppliers of gas for Nabucco, leaving Nabucco high and dry. Thus, Azerbaijan, Uzbekistan, Turkmenistan, Iran and Iraq are being touted as potential suppliers to Nabucco.
Until now the main gas supply for Nabucco should be Azerbaijan, the source of large oil reserves captured by a BP-led Anglo-American consortium bringing Baku oil from the Caspian Sea to the west, independent of Russia. That Baku-Tbilisi-Ceyhan oil pipeline was a major reason Washington backed the 2004 Georgian ‘Rose Revolution’ that put dictator Mikhail Saakashvili into power.
In July 2009 Russia’s Medvedev and Gazprom CEO Alexei Miller went to Baku and signed a long-term contract to buy all the gas from the Azeri Shah Deniz-2 offshore field, the same field Nabucco hopes to tap for its pipeline. Azerbaijan’s President Aliyev seems to be playing a cat-and-mouse game with both Russia and EU-Washington, to play one off against the other for the highest price. Gazprom agreed to pay an unusually high price of $350 per thousand cubic meters for their Shah Deniz gas, a clear political not economic decision by Moscow that owns controlling interest in Gazprom. [12] In early January 2010, the Azeri government also announced sale of a portion of its gas to neighboring Iran, another blow to Nabucco supply.[13]
http://www.globalresearch.ca/articlePictures/engdahl3.1.JPG
Recently discussed some aspects here.
Greater Khazar Empire.
http://gold-silver.us/forum/index.php?topic=2538.msg23659
High-stakes Eurasian Chess Game: Russia’s New Geopolitical Energy Calculus
Tectonic Shift in Heartland Power: Part II
by F. William Engdahl
Notes and links at original article.
http://globalresearch.ca/index.php?context=va&aid=18129
Russia’s North-South-East-West energy strategy
The defusing of major Washington military threats is far from the only gain for Moscow in having a neutral but stable Ukrainian neighbor. Russia now vastly improves its ability to expand the one great power lever it has, outside of its remaining and still formidable nuclear strike force. That lever is to counter Washington’s relentless mililtary pressure by cleverly using export of the world’s largest reserves of natural gas, a fuel much in demand in Western Europe and even in UK where North Sea fields are in decline.
According to west European industry estimates, demand within the European Union countries for natural gas, especially for use in electric power generation where it is seen as a clean and very efficient fuel, is estimated to rise some 40% from today’s levels over the next twenty years. That increase in gas demand will coincide with a decline in current gas output from fields in the UK, Netherlands and elsewhere in the EU. [1] With Ukraine’s shift from hostile opposition to Moscow to what Yanukovych terms ‘non-aligned’ neutrality -- with an early emphasis on stabilizing Russian-Ukrainian gas geopolitics -- Moscow suddenly holds a far stronger array of economic options with which to neutralize Washington’s game of military and economic encirclement.
When Yushchenko and Georgia's Saakashvili took the reins of power in their respective countries and began taking steps with Washington to join NATO, one of the few means available for Putin’s Russia to re-establish some semblance of economic security was its energy card. Russia has by far the world's largest known reserves of natural gas. Interestingly, according to US Department of Energy estimates, the second largest gas reserves are in Iran, a country also high on Washington's target list.[2]
Today, Russia is clearly pursuing a fascinating, highly complex multi-pronged energy strategy. In effect it is using its energy as a diplomatic and political lever to ‘win friends and influence (EU) people.’ Putin’s successor as President, Dmitry Medvedev, is well suited to the role of overseeing gas pipeline geopolitics. Before becoming Russian President, he had been chairman of the state-owned Gazprom.
High-stakes Eurasian chess game
In a sense, the Eurasian land area today resembles a geopolitical game of three-dimensional chess between Russia, the European Union member countries, and Washington. The stakes of the game are a matter of life and death for Russia as a functioning nation, something clearly Medvedev and Putin well realize at this point.
US attempts at the military encirclement of Russia included not only the Rose and Orange Revolutions in 2003 and 2004, but also the highly provocative Pentagon missile ‘defense’ policy of placing US-controlled (not NATO-controlled) missiles in key former Warsaw Pact countries on Russia’s direct perimeter. As a result, Moscow has developed a remarkable and complex energy pipeline strategy to undercut a clearly hostile US military strategy that has used NATO encirclement, missile deployments, and ‘color revolutions,’ including the attempted destabilization of Iran during summer 2009 with a ‘Green Revolution’ or what Hillary Clinton flippantly dubbed the ‘Twitter Revolution.’ All of these US moves have attempted to isolate Russia and weaken her potential strategic allies across Eurasia.
For Russia, which recently surpassed Saudi Arabia as the world’s largest oil producer and exporter, sales of its natural gas abroad has a significant advantage in that Moscow is better able to control the price and market of gas. Unlike oil, whose price is tightly controlled by a cartel of Big Oil (and their Wall Street co-conspirators such as Goldman Sachs, Morgn Stanley, JP MorganChase), natural gas is far more difficult for Wall Street to manipulate on a short-term speculative basis as with oil.
Because gas, unlike oil, is dependent on construction of costly pipelines or LNG tankers and LNG port terminals, it tends to have a price fixed by bilateral long-term agreements between buyer and seller. That gives Moscow a degree of protection against events such as the brazen Wall Street manipulation of oil prices in 2008-2009 from a record high of $147 a barrel down to below $30 only months later, manipulations which devastated Moscow’s oil earnings at just the time the global financial crisis cut off credit to Russian banks and companies.
With Yanukovych now President in Ukraine, the way appears clear for a rational gas supply and transit contract from Russia’s Gazprom to and through Ukraine, and continuing on to western Europe. Fully half of Ukraine’s domestic energy comes from natural gas and the overwhelming bulk of that gas, some 75%, comes from Russia. [3]
At this point it seems a stable settlement has been reached between the Russian and Ukrainian governments on pricing for imported Russian gas. As of January 2010 Ukraine has agreed to pay prices close to western European levels for its gas, and at the same time she will get significantly higher transit fees from Russia’s state-owned Gazprom for transporting Russian gas through to western Europe. Some 80% of Russian gas exports went through Ukraine up until now. [4]
That’s about to change dramatically however, with the implementation of Russia’s long-term pipeline strategy, a strategy designed to make Russia less vulnerable to future political shifts such as the 2004 Ukraine Orange Revolution.
http://www.globalresearch.ca/articlePictures/engdahl2.JPG
After the 2004 Ukraine Orange Revolution, Moscow’s western pipeline strategy until now has been to bypass both Ukraine and Poland through construction of an underwater gas pipeline, Nord Stream, running from Russia directly to Germany. Poland’s Foreign Minister Radek Sikorski is a Washington trained neo-conservative . As the previous Defense Minister, he played a central role in Poland’s missile defense agreement with Washington. Sikorski’s Poland today is bound closely to NATO, including agreeing to Washington’s militarily provocative missile deployment policies, and he is trying at every turn, so far unsuccessfully, to block construction of Nord Stream.
Nord Stream was especially vital for Russia when it looked possible that Washington might succeed in pulling Ukraine into NATO after the Orange Revolution. Today the alternative Baltic Sea pipeline assumes a different importance for Russia.
The Nord Stream gas pipeline from Russia’s port of Vyborg near St. Petersburg to Greifswald in northern Germany, goes beneath the Baltic Sea in international waters, completely bypassing both Ukraine and Poland. When Nord Stream was announced as a joint venture between two major German gas companies, E.ON and BASF with Russia’s Gazprom, and with former German Chancellor Gerhard Schroeder as board member, Sikorski, then Poland's Defense Minister, compared the German-Russian gas deal to the Molotov-Ribbentrop pact -- the 1939 pact between Nazi Germany and the Soviet Union which divided Poland between the two. [5] Sikorski’s logic was not so precise but his emotional imagery was.
In late 2009 Sweden and Finland joined Denmark in finally granting passage rights through their portion of the Baltic Sea for the pipeline. Construction of the multi-billion dollar project is due to begin this April and gas deliveries are to begin in 2011. When a second parallel pipeline, due to start construction in 2011, is completed, Nord Stream anticipates a full capacity of 55 billion cubic meters of gas a year, enough to fuel 25 million households in Europe, according to the Nord Stream website.
With Nord Stream’s primary gas route directly from Russia to its major clients in Germany, along with a stable transit agreement through Ukraine, the likelihood of a disrupted supply of Gazprom deliveries to northern Europe becomes remote. Nord Stream will allow Moscow’s Gazprom to use a more flexible gas diplomacy and to greatly lessen future vulnerability to transit country supply disruptions such as it has had in recent years from a hostile Ukraine.
At the end of 2009 in Minsk, just as Nord Stream was clearing the final political hurdles, Russian President Dmitry Medvedev met with Belarus officials. Medvedev said that Russia was considering a second leg of its large Yamal-Europe gas pipeline through Belarus if future demand from western Europe warranted, stating, “I think the more possibilities there are for Russian gas supplies to Europe, the better it will be for both Europe and Russia.†[6]
In addition, in a notable geopolitical shift, the UK has just signed a long-term contract with Gazprom to import gas via the Nord Stream to meet more than 4% of UK gas demand by 2012, as Britain shifts from being a gas exporter to a gas importer.[7] Presently, in addition to the UK and Germany, Gazprom now has contracts to supply Denmark, The Netherlands, Belgium and France, making it a major new factor on the EU energy supply market.
South Stream strategy
Meanwhile, Washington, bitterly opposed to Nord Stream, attempted unsuccessfully to block it by proxy through back-door support for Poland and other EU opposition.
In a second major front in what could be called the Russia-USA pipeline wars, the US has initiated competing proposals to build gas pipelines to serve the countries of southern and southeastern Europe. Here Washington is openly backing what is called the Nabucco pipeline project. Moscow is promoting what it calls its South Stream project, the southern Eurasian sister to the Nord Stream in the north of Europe.
On December 12, 2009 the government of Bulgaria, a former Warsaw Pact member now in NATO and the EU, announced that it would participate in Moscow’s South Stream project despite considerable pressure from Washington.
In June 2007, Gazprom and Italy’s ENI concern signed a Memorandum of Understanding for the South Stream project to design, finance, construct and manage the South Stream. ENI, Italy’s largest industrial company, created in the 1950’s by Italy’s legendary Enrico Mattei, is also partly state-owned and has been involved in the Russian gas business since the early 1970’s.
South Stream’s offshore section is to run under the Black Sea from the Russian coast to the Bulgarian coast, a length of around 550 miles at a maximum depth over two kilometers and have a full capacity of 63 billion cubic meters, even larger than Nord Stream.
From Bulgaria, South Stream will split into two arms, the northern section stretching to Romania, Hungary, the Czech Republic and Austria and the southern arm going through Bulgaria to southern Italy. The new pipeline is expected to become operational in 2013.
Gazprom has an agreement to provide Italy with gas until 2035 and South Stream will be the main vehicle for that. South Stream AG, the 50-50 Gazprom-ENI joint venture is registered in Switzerland. To date Gazprom has signed transit agreements for the pipeline with the Republic of Serbia and Greece and Hungary. [8] In January 2008, Gazprom bought 51% of the Serbian state oil monopoly NIS to secure its presence there.
An indication of the pressure that Washington has put on Bulgaria over its participation in Russia’s South Stream is that Bulgaria also signed up to take part in the Nabucco project in December 2009. Commenting on the dual signings, Bulgaria’s Prime Minister Boyko Borisov told the press, “Nabucco is a priority of the European Union while the Russian South Stream is moving forward very quickly and many European countries are joining it almost daily.†[9]
On March 3, 2010 the new Croatian government of Prime Minister Jadranka Kosor signed an agreement in Moscow with Russian Prime Minister Vladimir Putin allowing the pipeline to pass through Croatian territory, setting up a 50-50 joint venture to realize the construction.
Kosor said that the agreement ‘On the Construction and Exploitation of a Gas Pipeline on Croatian Territory’ creates a legal basis for Croatia's involvement in South Stream, allowing the parties to set up a 50/50 joint venture. Two days later, in what seemed a snowballing enthusiasm for Gazprom’s project, the Bosnian Serb Republic announced that it, too, will join the South Stream gas pipeline project. It proposes to build a 480 km pipeline in northern Bosnia and link it to the South Stream pipeline, bringing the total number of participating countries that have signed deals with Gazprom to seven. [10]
In addition to Serb Bosnia, Gazprom’s partners now include Bulgaria, Hungary, Greece, Serbia, Croatia and Slovenia. It almost retraces the Balkan route of the controversial Berlin-to-Baghdad railway which played such a decisive geopolitical role in British machinations that ultimately led to World War I following the assassination of the Austro-Hungarian heir to the throne, Archduke Francis Ferdinand.[11]
The central issue for the two competing pipeline projects, South Stream and Nabucco, is not who will buy their gas. As noted, natural gas demand across Europe is expected to rise dramatically in coming years. Rather it’s the question of where the gas will come from to fill the pipeline. Here Moscow now clearly holds the trump cards.
In addition to gas directly from Russia’s gas fields, a major component of South Stream gas is to come from Turkmenistan and from Azerbaijan and possibly at some point from Iran. In December 2009 Russian President Dmitry Medvedev went to Turkmenistan to sign major agreements on energy cooperation.
Until the breakup of the Soviet Union in 1991, Turkmenistan was a republic of the Soviet Union, the Turkmen Soviet Socialist Republic, Turkmen SSR. It is bordered by Afghanistan to the southeast, Iran to the south and southwest, Uzbekistan to the east and northeast, Kazakhstan to the north and northwest and the Caspian Sea to the west. Russia’s Gazprom until now has been the dominant economic partner of the country, which has newly confirmed huge gas reserves. Turkmen gas has been vital for the supply chain of Gazprom and dates back to the era when Turkmenistan was an integral part of the Soviet Union and the Soviet economic infrastructure.
When ’President for Life,’ Saparmurat Niyazov, known as ‘Türkmenbaşy’ or ‘leader of the Turkmens,’ died unexpectedly in December 2006, Washington began entertaining hopes of weaning the new President, Gurbanguly Berdimuhamedow, away from Russia and into the US orbit. To date they have met with little success.
The Medvedev-Berdimuhamedow December agreements included new agreements for Turkmen long-term gas supplies to Gazprom which will fill the South Stream pipeline either directly or by replacing Russian gas to the same -- meaning Nabucco is left out in the cold there.
Nabucco high and dry...
The active pipeline diplomacy of Russia and Gazprom in recent months has dealt a devastating blow to Washington’s favored alternative, Nabucco, which is planned to run from the Caspian region and Middle East via Turkey, Bulgaria, Romania, Hungary with Austria and further on to Central and Western European gas markets, some 3,300 km, starting at the Georgian-Turkish and/or Iranian-Turkish border. End station would be Baumgarten in Austria. The project is parallel to the existing US-backed Baku-Tbilisi-Erzurum oil pipeline and could transport 20 billion cubic meters of gas a year. Two-thirds of the pipeline would pass through Turkish territory.
Following a two day visit to Ankara in April 2009, US President Obama appeared to have won a major victory for Nabucco when Turkey’s President Erdogan agreed to sign on to the project in July 2009, after several years of delay. Nabucco is an integral part of a US strategy of total energy control over both the EU and all Eurasia. It explicitly has been conceived to run entirely independent of Russian territory and is aimed at weakening the energy ties between Russia and Western Europe. Those energy ties were considered a significant reason why the German government along with France refused to back Washington’s push to bring Ukraine and Georgia into NATO.
Today the future of Nabucco is in grave doubt. The problem is that Russia’s Gazprom has all but locked up long-term gas contracts with all the potential suppliers of gas for Nabucco, leaving Nabucco high and dry. Thus, Azerbaijan, Uzbekistan, Turkmenistan, Iran and Iraq are being touted as potential suppliers to Nabucco.
Until now the main gas supply for Nabucco should be Azerbaijan, the source of large oil reserves captured by a BP-led Anglo-American consortium bringing Baku oil from the Caspian Sea to the west, independent of Russia. That Baku-Tbilisi-Ceyhan oil pipeline was a major reason Washington backed the 2004 Georgian ‘Rose Revolution’ that put dictator Mikhail Saakashvili into power.
In July 2009 Russia’s Medvedev and Gazprom CEO Alexei Miller went to Baku and signed a long-term contract to buy all the gas from the Azeri Shah Deniz-2 offshore field, the same field Nabucco hopes to tap for its pipeline. Azerbaijan’s President Aliyev seems to be playing a cat-and-mouse game with both Russia and EU-Washington, to play one off against the other for the highest price. Gazprom agreed to pay an unusually high price of $350 per thousand cubic meters for their Shah Deniz gas, a clear political not economic decision by Moscow that owns controlling interest in Gazprom. [12] In early January 2010, the Azeri government also announced sale of a portion of its gas to neighboring Iran, another blow to Nabucco supply.[13]
http://www.globalresearch.ca/articlePictures/engdahl3.1.JPG