EU Agrees Deal On Energy Links With 'Southern Corridor'

European Commission President Jose Manuel Barroso (left) shows Turkish President Abdullah Gul (right) and Azebaijani President Ilham Aliyev documents after the signing of the Nabucco pipeline agreement plan in Prague.

May 08, 2009
By Antoine Blua

PRAGUE -- The European Union has agreed on joint goals with supplier and transit states at talks in Prague aimed at establishing long-term energy and transport links with the Middle East and Central Asia.

The "Southern Corridor-New Silk Road" summit brought together leaders and ministers of the EU and Azerbaijan, Georgia, Turkey, Turkmenistan, Uzbekistan, Kazakhstan, and Egypt -- all either key suppliers of natural gas, crucial transit countries, or both.

Two suppliers -- Azerbaijan and Egypt -- and two key transit states -- Turkey and Georgia -- agreed to give "the necessary political support," and, where possible, "technical and financial assistance" to the construction of planned pipelines and transport routes needed to bring gas from the Caspian Basin region and the Middle East to the European market.

The final declaration also calls on energy producers to identify noncommitted natural-gas and oil volumes that can be dedicated specifically to the EU.

The EU, for its part, bound itself to "provide producers with reliable commitments on their aggregate demand," and to help them improve their energy efficiency.

At the end of the talks, European Commission President Jose Manuel Barroso described the summit as "very important."

Barroso said that the "'Southern Corridor initiative' is the key priority project for the European Union. Our objective was to provide a further political push for the implementation of this strategic initiative and this was indeed achieved during this very important summit."

Boost To Nabucco

In particular, the summit gave a boost to the Nabucco project, with a commitment by Turkey's President Abdullah Gul to sign up to a deal on the construction of the gas pipeline running from the eastern border of Turkey to Austria by next month. But Gul made clear he expected some progress on Turkey's stalled EU membership talks.

Path of the Nabucco pipeline (click to enlarge)
Turkey and Georgia, as transit states, signed a pledge to create a "clear, transparent, cost-based, stable and nondiscriminatory transportation regime" across their territories.

But questions hung over the attitude of Kazakhstan, Turkmenistan, and Uzbekistan, which did not sign the declaration.

Barroso said energy talks between the EU and Turkmenistan have been going very positively and there was marked progress. He said a Turkmen Foreign Ministry delegation would visit Brussels on June 4 to hold talks on the energy issue.

Meanwhile, Czech Prime Minister Mirek Topolanek said Turkmenistan was serious about its new energy pipeline plans and sees no obstacle in diversification of its gas export routes.

Ahead of the summit, RFE/RL's Brussels correspondent Ahto Lobjakas said that for the first time, the EU had given its open backing to plans to build a trans-Caspian gas pipeline from Turkmenistan to Azerbaijan. This would allow Turkmenistan, Kazakhstan, and Uzbekistan to feed their gas directly into the Nabucco gas pipeline.

Lobjakas noted that this is the first time that the EU has officially given assurances to the Central Asian and South Caucasus countries that it will commit "whatever political, economic, and financial resources are necessary to the project of forging a direct link to the Caspian Sea." While this primarily concerns gas reserves, it's "also about oil and transport."

Pipeline Network

In order to reduce reliance on gas supplies from Russia, the EU is pushing for the construction of three new pipelines in the region, which would ultimately bring natural gas from the Caspian Basin and from as far away as Iraq to Europe.

The three pipelines are Nabucco, running from the eastern border of Turkey to Austria; White Stream, running from Georgia under the Black Sea to Romania; and the Interconnector between Turkey and Greece and Italy (ITGY).

Combined, all three pipelines could supply up to 10 percent of the EU's total gas need by 2020, or some 60 billion cubic meters. Russia currently provides the EU with some 150 billion cubic meters annually, and that figure is not expected to rise significantly.

Lobjakas says everything turns on political issues, namely to what extent the EU can convince the Central Asian and South Caucasus states that they can safely ignore Moscow's stiff resistance to the EU-backed pipeline projects bypassing Russian territory.

"If the EU follows through, if the larger member states follow through, especially if the trans-Caspian pipeline is built, linking the Central Asian countries directly to projects such as Nabucco, then they will have a very real option in the future, a very real choice, to delivering gas only via Russia," he says.

"Now this doesn't mean that Russia will disappear from their radar screens, but these countries will acquire a far more substantial political and economic latitude in their decisions."

Three major regional players were missing at the summit -- Iraq, Qatar, and Iran. Energy-rich Iraq was invited but did not send a representative.

An EU official told RFE/RL privately before the summit that Qatar, a major gas producer, had not been invited "for the time being," but did not elaborate.

Another official told RFE/RL privately that Iran would be invited to participate "when circumstances permit," an allusion to the country's internationally controversial nuclear program.

Russia attended as an observer, along with the United States and Ukraine.
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