The big energy game in Mediterranean / Hurriyetdaily

The big energy game in Mediterranean

The British Petroleum company announced on June 28 that the natural gas from Azerbaijan’s Caspian Sea fields of Shah Deniz will be connected to the Trans Adriatic Pipeline (TAP) via the Trans Anatolian Pipeline (TANAP) for European markets. This project is likely to kill Nabucco softly.

This will be the first big project to pump Caspian basin gas directly to the industrial centers of Europe, bypassing the needs for shipment and expensive liquidification stations. The 1,730-kilometer TANAP is planned to carry Azeri gas across Turkey to the border with Greece. Set to be coupled with the already-existing InterConnector line to the 870-kilometer long TAP, it will be carried (crossing Albania, too) to the San Foca terminal of Adriatic Italy. For a start, by 2020 some 16 billion cubic meters will be pumped from Baku. Turkey is planning to buy 10 bcm of it to diversify its sources of energy, as an alternative to Russian gas. The capacity of the line is expected to rise gradually to 31 bcm by 2026.

Azerbaijan has been making considerable energy investments in its close partner Turkey, buying oil refineries, and constructing new ones on top of an already-existing (again BP-operated) pipeline carrying oil from Baku through Tiblisi to Turkey’s Mediterranean port of Ceyhan; which is just next to NATO’s İncirlik Air Base that hosts one of the biggest U.S. military presences in the region.

Well, people talk about the Adriatic Sea and Aegean Sea, but they are all parts of the Mediterranean around which the Old World civilization was formed.

In other parts of the Mediterranean, another, a more tense part of the energy game is going on. Syria has been in a civil war for the last two years, escalating the tension in the East Mediterranean further. The term East Mediterranean includes still-unsettled Egypt, which hosts a major energy channel – the Suez – the Israeli-Palestinian conflict, Lebanon, Turkey and Greece in the north and the island of Cyprus right in the middle of everything.

Off the shores of Cyprus and Israel, new and reportedly new gas fields have been discovered. The Greek Cypriot government, ignoring Turks’ calls to make use of all (including their) resources together, opened tenders to produce and sell the gas to Europe, also as a cure to its bankrupt economy. Turkey, on the other hand, announced that it will blacklist all companies cooperating with the Greek Cypriot gas project from Turkish energy projects; that vow became real for Italian Eni, which actually built the “Blue Stream” gas pipeline under the Black Sea carrying Russian gas to Turkey.

Israel wants to carry its gas to European markets. They know that the shortest route is a pipeline via Turkey, especially after the U.S. made economic use of shale gas, which made LNG terminals and shipping costs more deterrent. Israelis also know that when their government pays the compensation sourcing from an apology for killing nine Turks in 2010 and the politics is back on track, there is no obstacle to that project.

But the Greek Cypriots insist on building an LNG terminal and invite Israel to contribute, which might make things more complicated with Turkey. Another Greek Cypriot project is to build a pipeline under the Mediterranean to mainland Greece with the support of the European Union. The distance between Cyprus and mainland Greece is approximately 850 kilometers as the crow flies (distances to Greek islands are no less: 450 kilometers to Rhodes, 550 kilometers to Crete). The distance between Turkey and Cyprus is 70 kilometers.

But that is not the whole story. As the situation in Syria deteriorates, Russia has started to evacuate the personnel from its military base in the Tartus port of Syria, which has been its only one in the whole region.

On the other hand Moscow sent a part of its Pacific Fleet to the East Mediterranean to be a “permanent” power there. Russian ships are now anchored at the Limassol and Baphos ports of Greek Cyprus, a member of the EU. The Russians have asked the Greek Cypriot government to ink a military deal with them similar to the one Nicosia signed with Germany, another EU member, and also a member of NATO. (Yes, the Germans have an exclusive military agreement with the Greek Cypriots, which also explains the rising German pressure on Turkey regarding Cyprus.)

As more Azeri gas and oil start to feed the energy needs of Europe, despite the competition from the Russians, Iranians and Arabs in a few years, there is likely to be more presence of the American 6th Fleet in the East Mediterranean.

June/29/2013*http://www.hurriyetdailynews.com/PrintNews.aspx?PageID=383&NID=49682

Diplom-Volkswirt
Udo von Massenbach
Publizist /Massenbach-Letter

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