The Trans-Adriatic Pipeline and the Turkish Stream pipeline are poised to repeat the same mistakes of their more famous predecessors – the Nabucco and South Stream pipelines. Both raise more questions than answers and are tools of foreign policies for different states rather than real objectives. This only increases the chances that both projects may one day be described as “virtual pipelines”. Southeast European countries however do not have to be losers in this game because these pipelines are not about gas, but politics.
On June 28th 2005, OMV of Austria, MOL Group of Hungary, Bulgargaz of Bulgaria, Transgaz of Romania and BOTAŞ of Turkey signed a joint venture, which (as it seemed at the time) was destined to pave the way for an ambitious new project. The Nabucco was supposed to be the answer to the European Union’s energy vulnerability and over-dependence on Russian gas. The aim of the Nabucco was to allow Europe to access gas from the Caspian Sea. Two years later, also in June, representatives of Russian Gazprom and Italian ENI signed a memorandum of understanding for the construction of the South Stream – a pipeline which was meant to respond to the gas needs of southern European countries. It was an open secret that it was primarily conceived as a competing project to the EU-supported Nabucco. This was the beginning of a great virtual pipeline rivalry between Nabucco and South Stream. It ended rapidly and unexpectedly, however. First, in June 2013, Shah Deniz consortium decided to pick the Trans-Atlantic Pipeline (TAP) over Nabucco. Then in December 2014 Russia announced that plans to build South Stream would be dropped.
Yet, the competition did not end there. Nabucco was replaced by the TAP, whereas South Stream by Turkish Stream – a new initiative which foresees gas deliveries to Europe via Turkey. In reality, however, everything is at exactly the same point as it was a decade ago. Once again, we are witnessing the competition between two virtual pipelines, which may (or may not) materialise, but which will heavily impact not only the energy discourse in Europe, but also the political dynamics, especially in Central, Eastern and South Eastern Europe.
A virtual pipeline exists only in discourse. Its name appears on memoranda, agreements, official statements and press releases. But it does not materialise. To the contrary, it is used mainly as a tool of domestic or foreign policy, a motivator and a reward but also as a tool of blackmail and extortion. For almost eight years (2007 – 2014) the above factors were present in two competing narratives – a narrative of “energy diversification” epitomised by Nabucco and the narrative of “consolidation of a reliable partnership” represented by South Stream. Some “engineers” were selling a vision of diversified energy supplies, limiting the dependence on Russian gas. Others, at the same time, were undermining the reliability of the biggest gas supplier, marking potential “disruptors” (e.g. Ukraine) and arguing that only a direct route can help to mitigate any disruptions or unforeseen delays.
The Trans-Atlantic Pipeline and Turkish Stream so far have followed in the footsteps of their (direct and indirect) predecessors. They both raise many questions and doubts especially at a time of increased tensions between Russia and the West.
Turkish Stream – when will it end?
What exactly is Turkish Stream? No one really knows much about it apart from two obvious facts. Firstly, that it should transport gas from Russia to Turkey (though Turkey still has not signed an official agreement). Secondly, that it seems to bypass the territorial waters of Crimea (even if the official Gazprom map rather unsurprisingly shows it as part of the Russian Federation).
The lack of more specific information does not stop analysts from producing forecasts about its impact on the European Union or the Balkans, thus creating a new augmented energy reality. Greece reportedly has already managed to sign a deal for its part of the pipeline. The Bulgarians ask how it is possible, and what makes it so different from South Stream which was supposed to pass through Bulgaria and was blocked by the European Commission. All of this is caused by a seven-month old virtual project.
The pipeline itself is estimated to cost approximately 3.3 billion euros, which is “tentative” and “based on the cost of the South Stream gas pipeline providing the construction of the pipeline to Bulgaria”. This would imply that what we could really call the “Turkish Stream” is only a pipeline connecting Russian and Turkish shores (previous estimates put the overall cost of the South Stream somewhere between 19-24 billion euros). Any pipeline or interconnector which would run from Turkey to Greece and Bulgaria would be a separate construction.
This may be the rationale employed by many actors within the Russian administration (and the EU) to justify how different the Turkish Stream is from its predecessor, the South Stream. Questions remain whether such a Turkey-EU interconnector would be subject to the EU Third Energy Package, one of the nails in the South Stream’s coffin. Lack of clarity on the political scene in Turkey further clouds the picture. An inconsequent result of the recent parliamentary election could in the best-case scenario freeze any progress of the Turkish Stream.
Trans-Adriatic – a single pipeline or a network?
A similar doubt, as in the case of the Turkish Stream, can be raised with the TAP. Where does it start and where does it end? The Trans-Adriatic Pipeline is a natural gas pipeline foreseen to transport gas from the Shah Deniz II field via Greece and Albania and then across the Adriatic Sea to southern Italy. In reality however, what is officially labelled as TAP, is supposed to run only from Kipoli on the Turkish-Greek border to Melendugno in South Italy.
Its initial capacity is primarily designed for 10 billion cubic metres per year, which could potentially be doubled. Further to that, Albania plans to establish a national gas grid as well as underground gas storage facilities which could act as an additional source of supply in case of any unforeseen disruptions. “This feature is expected to enhance the gas supply reliability for the EU energy markets and for South Eastern Europe in general and it is argued to be a key advantage of the TAP project.”
TAP is often presented as a more cost-efficient initiative as it seeks connections with other (virtual) pipelines such as the Ionian-Adriatic Pipeline or the Gas Interconnector Greece-Bulgaria. The first would provide gas to countries based along the Adriatic coast from Montenegro to Bosnia and Herzegovina and Croatia, whilst the second would allow to direct supplies to Bulgaria. The myriad of partners and possible scenarios only increases uncertainty. Similar challenges have haunted Nabucco, when some countries were openly flirting with both Nabucco and South Stream, undermining both as a result. In both cases Greece plays the pivotal role. It can also be the spoiler of one (or both) of the pipeline projects. Its complicated and still unresolved situation within the Eurozone cast doubt as to whether any of these two pipeline commitments is an objective in Greek energy policy, or just a tool of its ad hoc European/foreign policy.
Pipelines as tools
Drawing from the history of Nabucco and South Stream, as well as the current debates about TAP and Turkish Stream, one can conclude that in both cases the result (pipeline) is less important than the process (politicisation of the pipeline). In both cases potential recipients, including energy-hungry South East European countries, can only watch and react while decisions are made at the level of great power politics, within the square of Brussels-Moscow-Ankara-Washington.
The Kremlin is keenly applying misinformation. Almost every day one can read about memoranda and agreements about increasing Nord Stream’s capacity, building Turkish Stream, keeping both Yamal and GTS (which may also be cancelled) or the newest virtual pipeline – the Eastern Ring. There is not enough demand for so much Russian gas. There is not enough Russian gas to fill all five pipelines. The Kremlin is very consciously playing European countries against each other, exploring their energy needs. Instead of creating energy policy, they only react.
The EU is not able to compete with the same methods. The European Union is not a unitary actor. It has no common energy policy. Security of external energy supplies will remain in the foreseeable future a sole responsibility of national governments. The ambitious agenda set by the Energy Union may reshape the internal energy market, but it will have limited impact on external energy relations. It was already shown when the original idea, put forward by Donald Tusk in his article for Financial Times in April 2014, was watered down by the exclusion of its key argument – the need for the EU to have a mechanism of joint negotiations of contracts with Gazprom.
The shock caused by Russia’s cancellation of South Stream, despite signed agreements and initial investment (predominantly in Serbia) has shown that nothing can be certain until the pipeline is both built and operational. Signed agreements are no proof of the seriousness of the project. The recent Greek-Russian memorandum is a great PR victory for the Kremlin, but nothing more than that.
Will TAP and Turkish Stream meet the fate of Nabucco and South Stream?
Virtual pipelines are here to stay. In Europe they have become tools in the renewed competition between Russia and the West. As it was in the case of Nabucco and South Stream, the term one will most often hear in the debates over TAP and Turkish Stream will be “geopolitics”, or its variation – “geoeconomics”; Not “economic viability”. Why then, will they remain virtual?
Firstly, various examples of virtual pipelines show that they are usually short-term and politically driven projects. A change in government can lead to a complete overhaul of an energy policy. Pipelines are a long-term investment. They like stability just like their investors. Uncertainties surrounding Turkish Stream and TAP may in the end decide their fate. Secondly, the European Commission seems to be more inclined to “root out” energy islands in South East Europe. Although the European Commission prioritises energy diversificationit seems that the agenda of Energy Union will be more inward looking.And thirdly (and perhaps most importantly), is because Europe in general and South East Europe in particular do not really need so much gas. The European Commission’s 2050 Energy Roadmap projects a decline in natural gas imports. As researchers from South East Europe Energy task force point out, although gas is almost exclusively imported from abroad, it accounts for a relatively low proportion of the energy mix in the region. Countries do not need more gas. They need more energy efficiency, joint investment projects (e.g. in renewable energy), more significant use of hydropower, and most importantly – alignment with EU energy legislation, in particular with the EU Third Energy Package.
The debate between energy diversification versus reliability of supplies, characterised by the Nabucco and South Stream pipelines respectively, has had its impact on the politics of different European countries and on EU recommendations and policies, even though physical pipelines were never built. Nevertheless, Russia will continue to send mixed signals about different pipelines, while South Eastern European countries will continue promoting TAP in the hope that it will increase or speed up the process of their Euro-Atlantic (or only European) integration (apart from, of course, additional gas supplies).
In the end the pipelines primarily remain tools of foreign policy. Stories of two virtual “peace pipelines”: the Iran-Pakistan pipeline, or the Armenian-Azerbaijani pipeline (ideas circulating in the mid-1990s) are great examples of that. At this point it seems that both the Trans-Adriatic and the Turkish Stream pipelines will join their more famous predecessors – the Nabucco and South Stream.
Jarosław Wiśniewski is an academic and political analyst who specialises in international security and European politics. He holds a PhD in European Studies from King’s College London. Throughout his career, he has worked as a consultant for the European Commission, Council of Europe, British Council as well as a number of various public and private institutions in the EU, South Caucasus and South East Europe. He tweets @jarwisniewski. Republished with thanks to New Eastern Europe, a Natural Gas Europe Partner