Alternative to the alternative

The South Caucasus is understood by many economic or political analysts as a main route for transporting carriers of oil and natural gas from the Caspian Sea basin to Europe. Of course, Russia has directly or indirectly expressed its discontent about the existence of such a route. Moreover, it claims to be in control of the situation in the South Caucasus in the areas of its influence during the Soviet Union which is mainly stimulated by the wish to prevent alternative routes from functioning.

Russia wants the whole of Europe to be dependent on its natural gas and oil supply. But the reality is that the South Caucasus has already become a new route for transporting energy, bypassing Russia. There are pilot projects of an oil pipelineBaku- Tbilisi-Supsa, followed by Tbilisi-Baku-Ceyhan and the gas pipeline Baku-Tbilisi-Erzerum.. There are two countries in the region which can provide the facilities for transporting oil and gas to Europe via sea. These are Georgia and Turkey. In practically all the projects which exist as an alternative to Russian routes go through Turkey. The Baku-Supsa pipeline is of a limited capacity and, besides, Turkey has control of the Biospheres and it does not allow supertankers into the Black Sea, which is quite wise from an ecological point of view.

The leading role in supplying the west from the Caspian sea basin energy projects belongs to Azerbaijan. Recently, Baku was encouraged by its oil wealth and started conducting independent moves. On one hand it increased its supply of natural gas to Russia to 1 billion cubic meters and is probably aiming to the increase of this figure. On the other hand, it has recently concluded the agreement with Georgia and Romania on promoting a new route transporting its natural gas in liquefied form to Romania via Georgia. This is called the AGRI project. It envisages transporting natural gas to the Georgian Black Sea port of Kulevi by pipeline, building a factory for liquefying the gas into the special containers, transporting these containers to the Romanian port of Constanta. There they plan to build another factory for de-liquefying the gas from where the gas will be transported across Europe.

Hungary has already joined the project thereby protecting itself against pure dependence on Russian gas in the near future.

Of course, this possible and quite realistic move creates certain concern if not irritation in Turkey, because with this move there appears to be an alternative to the alternative. Through the AGRI route, natural gas will be transported bypassing Russia to Europe but simultaneously it will be bypassing Turkey as well. The vessels transporting liquefied gas from Kulevi to Constanta will not need to go through Biospheres and they will reach Europe bypassing Turkey. This reality creates new interests in the region. Moscow and Ankara all of a sudden appear in the cold, but Azerbaijan assures both of these capitals on its loyalty to them. It, as we have said, is increasing the gas supply to Russia and fulfills diligently its obligations towards Turkey concerning natural gas supply as well as oil. Moreover, Azerbaijan is prepared to become the main supplier of the NABUCCO gas pipeline project which will provide gas to Europe, the construction of which is attracting EU interest.

Is this a new development in the system of supplying natural gas to EU countries? Or is it purely an economic decision based on business interests. Analysts express different views. Baku was clearly upset when there were negotiations between Turkey and Armenia over the restoring of diplomatic relations and opening the borders between two countries. Baku was also very active in putting the Karabakh issue forward as the main precondition of improving Turkish-Armenian relations. Eventually, Azerbaijan achieved its goal and Turkish-Armenian plans were frustrated for the time being. But it looks like Baku intends to secure its position in case the Turkish ruling administration continues its attempts to establish a different mode of relations with Armenia. As for Romania and Georgia, as participants of AGRI project, both of them have their personal relations with Russia. Moscow is occupying almost 1/5 of Georgian territory and Romania has interests in Moldova where Russians are holding the Transdnestria region of Moldova with Russian population there. So, the situation is rather complicated from a political point of view. However, economically, it is a different matter. If the project is viable it will work If not, around USD 5 billion will be wasted in vain.