The eternal drama about natural gas for Europe from suppliers to the east played on multiple stages the week of Dec. 16.
As logistically critical Ukraine cozied up to Russia, to the dismay of Europeans and many Ukrainians, an important project advanced off Azerbaijan that contradicts obvious Russian expansionism.
Protests erupted in Kiev and elsewhere in Ukraine when President Viktor Yanukovych refused in late November to sign a cooperation deal with the European Union. The outcry didn’t dissuade Yanukovych. On Dec. 17 he accepted a promise from Russian Prime Minister Vladimir Putin for loans worth $15 billion and lower gas prices.
In past disputes over gas prices, Russia cut deliveries to Ukraine, which took supply anyway and passed wintertime shortfalls down the pipe to Europe.
EU complaints about Putin’s new cajolement so far have been no more effective than rioting by Ukrainians wanting closer ties to Europe.
Unlike Ukraine, Azerbaijan is strengthening its ties with Europe.
BP on Dec. 17 announced a consortium it leads will proceed with the second phase of development of giant Shah Deniz gas and condensate field in the Caspian Sea off Baku.
The move accommodates expansion of the South Caucasus Pipeline and construction of the Trans Anatolian Gas Pipeline across Turkey and Trans Adriatic Pipeline across Greece and Albania to Italy.
The network won’t deliver as much gas to Europe as Russia does through existing and new pipelines. But it represents a non-Russian option to European buyers, including some, like Bulgaria and Greece, that receive most of their gas from Russia.
It also boosts Turkey’s already growing importance as an energy hub and gas market.
Moscow cannot have found the Shah Deniz announcement as heart-warming as it did Yanukovych’s rejection of the EU deal.
In Brussels, meanwhile, EU leaders said they remain willing to sign a deal with Ukraine when the Kiev government is “ready” and “when relevant conditions are met.”
Somewhere in that diplomacy a pipeline surely lurks.
(This item appeared first online at www.ogj.com on Dec. 20, 2013; author’s e-mail: [email protected])