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Russia Says 'don't Touch my Market'

Natural gas consumption reaches its peak in December, January and February. “Natural gas,” “cuts,” “Russia” and its gigantic natural gas company “Gazprom,” are words mentioned very frequently during these cold winter months.

This is not only true for Europe and the Caucasus, but for us as well. One of the two pipelines transferring natural gas from Russia all the way to Turkey is The Blue Stream pipeline. The other pipeline crosses through Ukraine.

That is why last year Europe and Turkey survived a crisis between Ukraine and Russia over natural gas. If Turkey does not want to suffer future crisis situations, its greatest hope must be plans for a start to natural gas transfers from Azerbaijan.

As it may well be known, construction of a pipeline to pipe natural gas from Azerbaijan through Georgia and eventually to Erzurum would have been complete and transfers of natural gas would have already started. However, the way things stand, we will have to wait a little while.

Zaman’s Sunday issue ran as its headline, “Russia Hinders Cheap Azerbaijani Natural Gas.”

“If you sell Turkey the natural gas I give you for $120, we will increase the price to $230,” Moscow reportedly pressured Baku, according to Huseyin Sumer and Ercan Baysal.

According to BOTAS officials, Azerbaijan asked for a one year postponement of the 2007 natural gas agreement due to pressure from Moscow.

At the moment, Turkey does not have a positive outlook on this proposal.

As a matter of fact, it is a much deeper issue than just price. Though it may not be obvious, Russia is unnerved by a new rival in the market. Additionally, the effects of competition to further enhance efficiency are already being felt.

The Turkish market is one of the few large markets Russia has, and Russia wants to expand its reach to other potential markets through Turkey.

A news report appeared in the February 6 2006 issue of the Russian daily Nezavisimaya, headlined “Turkey Plays for Both Pipelines at the Same Time.”

The article said Azerbaijan might object to plans by Gazprom to sell natural gas through “Blue Stream” to southern Europe, the Middle East and Israel. Gazprom is trying to develop “Blue Stream” and related projects after its involvement in the Anatolian route was challenged by Turkmenistan, Azerbaijan and Iran - a group of three countries that have turned the Blue Stream project to their advantage.

But the Turkish government does not favor Gazprom having easy access to new markets, especially after the Russian company refused to throw its support behind the Turkey-led Samsun-Ceyhan pipeline project.

With the “Blue Stream” project in the spotlight, plans to get natural gas from Turkmenistan have stalled. The focus was later placed on a natural gas pipeline, developed in parallel with the Baku-Tiflis-Ceyhan (BTC) as a different project from the gigantic oil companies with interests in Azerbaijan.

The Baku-Tbilisi-Erzurum (BTE) natural gas pipeline is an important development after BTC. Moreover, this is the second pipeline independent of Russia after the one Turkmenistan built to Iran in 1997.

BTE will not only affect Russian plans to expand its market to Turkey and other countries too, but it will also have an impact on its control over the Georgian market. That’s why the launch of the BTE project appeals to Georgia as well as Azerbaijan and Turkey. Georgia, a country with a dependence on Russia for natural gas, survived an energy crisis last year when Gazprom asked for higher fees.

Azerbaijan has vast natural gas reserves, most of which lie untapped. Baku is nonetheless importing about 5 billion cubic meters of natural gas from Russia to meet half of its needs and also uses it to generate electricity.

That’s why Azerbaijan is seeking a way out from under Russia’s pressure. Alternative resources are of vital importance to Turkey, too.

Despite efforts in recent years to diversify energy sources, Turkey still acquires 65 percent of its natural gas from Russia.

There is a large and increasing need for natural gas in electricity production, in industry and in heating. A natural gas pipeline from Azerbaijan to Greece and then to Italy is being planned in the upcoming years. Probably Bulgaria will also be a part of this.

I think the rivalry over access to natural gas and a pipeline in Anatolia will become even fiercer then. It calls for readiness now.



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