Robert Amsterdam

From Russia Profile:

Diplomacy by Other Means

By Ariel Cohen

Russia’s Widening Energy Ties Rankle the West

Three major Eurasian energy developments announced this month have made Washington policymakers jittery.

First, Hungarian Prime Minister Ferenc Gyurcsany announced his country favors Gazprom's Russian gas pumped via Turkey to the much-lauded but long-delayed Nabucco gas pipeline project. Nabucco, spearheaded by the Austrians, was supposed to bring up to 30 billion cubic meters of gas per year (cm/y) from the Caspian to Europe through Turkey, Bulgaria, Romania, Hungary and Austria.

Second, Russia, Bulgaria and Greece signed an agreement to construct the Burgas-Alexandroupolis oil pipeline, which will bypass the Turkish-controlled Bosphorus Straits, a dangerous oil transport chokepoint. The project, which some call "the Orthodox Pipeline," will neutralize Turkey's control of the vital oil artery and reduce the danger of supply disruption stemming from a catastrophic event, such as a tanker fire or explosion in the middle of Istanbul.

In addition, the Burgas-Alexandroupolis pipeline will be 51% owned by three Russian government companies – Transneft, Gazpromneft and Rosneft – with the remaining 49 percent split between Bulgaria and Greece. Washington energy watchers noted the March 6 announcement by Vagit Alekperov, head of Lukoil, that his firm and Gazpromneft – the state-owned gas monopoly Gazprom's oil unit – will create a joint venture to develop a future project, which will also be 51 percent controlled by Gazpromneft.

Finally, British Petroleum hinted that its Russian partner TNK may sell out its share in TNK-BP to a Russian state-owned company. At the same time, Russia is developing plans for building the second Bosphorus bypass from a port on the Black Sea such as Samsun, to the Mediterranean.

Washington sees these projects as strategic moves. All announced within less than a month, they clearly indicate the Russian state is pursuing a comprehensive strategy that masterfully integrates geopolitics and geo-economics.

Complete article here.