East Med Pipeline to Europe Proof of Diverging Interests between Turkey, Russia
Amidst current geopolitical tensions between the West and Russia, a frenzy of diplomatic activity is taking place in Europe. On Monday, Russia's President Vladimir Putin announced Moscow’s intention to drop the South Stream project and move closer to Turkey. On Wednesday, EU High Representative Federica Mogherini met US Secretary of State John Kerry to discuss energy cooperation opportunities in the framework of the TTIP.
Against this backdrop, Natural Gas Europe had the pleasure of interviewing Stephen Blank, Senior Fellow, American Foreign Policy Council. We spoke about the role of Central Asia, Turkey and the East Mediterranean in the current arm-wrestling between the West and Russia.
Do you think that Kazakhstan has been used by Moscow for its foreign policies?
I would suspect that Moscow is trying to use Kazakhstan for its purposes, but Kazakhstan is nobody’s instrument. They are bordering both Russia and China. They have this huge Russian minority. They are very worried about that now. So they are not in the position to take provocative actions against Russia. On the other hand, they will defend their independence. Nazarbayev made it clear. He actually threatened them to walk out of the Eurasian Union.
Do you foresee clashing interests between Russia and Turkmenistan, which holds the fourth largest gas reserves in the world?
Yes. Russians want Turkmenistan’s gas to go only to China and Asia, not to Europe. They blew up the pipeline five years ago to prevent Turkmenistan from exporting on their own somewhere else. Moscow accepted the huge deal between Turkmenistan and China. It is going to be 65 Bcm a year. But Russians are unwilling to accept the Trans-Caspian Pipeline. Russia threatened in 2011 that they would have launched an Arab Spring in Turkmenistan.
Do you see any room for regional cooperation between Azerbaijan and Turkmenistan?
I am writing about that right now. So I don’t have a final answer.
During your lecture at the Institute for European Studies in Brussels, you said that “cohesion is a matter of convenience and not conviction,” is this the case between Turkey and Russia at the moment?
Yes. Economically, right now, their interests converge. But Turkey wants to be an energy hub and if Turkey becomes an energy hub, how much leverage would Russian gas have on Turkey then? Ankara would get gas from the Kurds, from Azerbaijan, from Turkmenistan. Right now, Erdogan wants his own independent foreign policies. He sees a very big role for Turkey and an energy hub makes sense. But still Turkish and Russian positions diverge. There are several differences: Crimea, Cyprus are two examples.
Cyprus, Greece and Israel are expected to propose a pipeline to European authorities next week. The pipeline would bring gas from the Eastern Mediterranean to Europe. Do you expect this to play any role in the relationship between Turkey and Russia?
It already does. The Turks have several times sent gunboats into the waters around Cyprus to show that they don’t want Cyprus to develop their gas in the Aphrodite's field. In 2011, the Russians sent their gunboats in retaliation because Cyprus was so important to Russia. So yes. It did not get a lot of press in Washington, but this is a major issue.
Do you expect that differences between Ankara and Moscow might rise over the next ten days due to this pipeline?
It depends where this pipeline will go through and what the numbers are. It will get the Turks’ attention. Turkey would probably oppose it. Greece and Russia have - well had - good relations. Israel and Russia still have good relations - Israel is not part of the sanctions - and Cyprus - of course.
On top of it, this would be another opportunity for Russia to get into another pipeline in Europe. So they are trying to get into that.
If you had to advise me, which would be the areas you would recommend me to follow? Where should I focus my attention in Europe in the coming months? What are the most important countries to understand the geopolitical dimension of the European gas industry?
I would focus on Russia. They are the key player, for good or for bad.
Do you see the Baltic countries having an important role in this?
They do on a regional level, because they are showing that they are trying to get away from Russian gas. They are trying to make deals with Scandinavia, they are trying to focus on nuclear and LNG, and so on. It is an important experiment.
Regarding Putin and Erdogan's joint press conference, Putin said that Russian LNG exports to Europe are not an option, that they are nonsense.
That is what he would say, because they can’t compete in LNG. The US could export LNG to Europe tomorrow if it changed the laws.
What’s your take on US LNG to Europe? Would you recommend a change in legislation?
It would be in the interest of the US to reform the gas export law. It is a 1938 law. Today the law states that if you want to buy gas from the United States, we will sell you the gas only if you have a Free Trade Agreement with us. Otherwise, you have to go through this very complex bureaucratic review, which takes a long time. If the review says it is ok, then we will sell you the gas. Therefore, I would argue in favour of the TTIP. It makes complete sense. It is another way to force the Russians on Ukraine.
Do you see any period of time this legislation might be changed?
I see nothing.
Sergio Matalucci is an Associate Partner at Natural Gas Europe. Follow him on Twitter: @SergioMatalucci