SC1407 Ed
SC1407 Ed
SC1407 Ed
org/stratcom
Editor: Alexander Nicoll; Assistant Editor: Sarah Johnstone
Pipelines through Georgia take energy to Europe without going through Russia, avoiding potential shut-offs like those that have afflicted Ukraine, above
the war in Georgia raised questions over Europes energy supplies. Georgia is the key transit country for Caspian oil and gas exports to the West. The BakuTbilisiCeyhan (BTC) and Baku TbilisiSupsa (BTS) oil pipelines, as well as the BakuTbilisiErzurum (BTE) gas pipeline, all pass through it. These are the only pipelines carrying Caspian hydrocarbons to Europe without going through Russia. Oil supplies through the BTC, which is operated by BP, were suspended just before war broke out because of an unrelated explosion at a pumping station in Turkey. Operations resumed later in August. Because of the war, BP shut off the oil pipeline to the Georgian port of Supsa as a precaution, and suspended the pumping of gas from Baku into the BTE pipeline for two days, also as a precaution. There were no known attacks on pipelines in Georgia during the war. The BTC pipeline has a capacity of 1 million barrels of oil per day, carrying oil from Azerbaijans fields in the Caspian. There are plans to expand it to carry supplies from Kazakhstan. The BTE pipeline pumps natural gas from the giant offshore Azeri field of Shah Deniz, which has proven reserves of 460 billion cubic metres. Its full capacity, which is expected to be reached by 2009,
is around 8bn m3 of natural gas per year. Because of the shutdowns during the war, Azerbaijan switched to alternative export routes, including a pipeline to the Russian Black Sea coast. Over the longer term, deteriorating relations between Russia and the West could affect plans to expand the transit of oil and gas through Georgia. Azerbaijan, Kazakhstan and Turkmenistan are unwilling to alienate Russia just when it is asserting its influence in the region. They want Moscow, and Western partners, to understand they will not take steps that would be seen by Russia as unfriendly or as a direct threat to its interests. After the Wests failure to prevent Russian intervention in Georgia, post-Soviet states will find it hard to embrace the Wests energy-security agenda at the cost of good relations with Moscow. Both Turkmenistan and Kazakhstan had already committed themselves to expanding transit via Russia though the East Caspian pipeline network. The prospects for the Nabucco project, intended to expand the supply of Caspian and Central Asian gas into Europe by extending the network onwards from Erzurum in Turkey at the western end and connecting to a proposed transCaspian pipeline from Turkmenistan, have become increasingly clouded.
The project is seen in Europe as a key strategic need, as it would reduce dependence on Gazprom and other Russian energy companies. The plan will not be helped by the fact that Azerbaijan is considering selling part of its gas to Russia and is unenthusiastic about substituting its role as a key supplier to Europe for that of a transit country for gas and oil from Central Asia. The region as a whole may also come to be seen as posing an increased investment risk, given the potential impact of recent events on the Nagorno-Karabakh conflict as well as possible future developments inside Georgia. Large-scale investments could therefore be delayed. But the moderate European Union reaction to the Georgian war appeared likely to rule out more dramatic effects on plans for new energy infrastructure. Its leaders could not agree at an emergency summit on sanctions against Moscow. These could have included cancelling or reviewing the Nord Stream and South Stream projects to build gas pipelines from Russia to Europe. While the war in Georgia may have reinforced the belief in Europe that it was necessary to reduce dependence on energy imports from Russia, EU members remain divided on how best to achieve this.
Strategic Comments
ISSN: 1356-7888