The following news reports are also very significant political developments coming out of Moscow. After a long wait, Russia has finally responded to the Western sponsored "trans-Caspian" gas pipeline initiative by finalizing an agreement with Turkmenistan and Kazakhstan. This agreement serves to undermine the West's recent inroads into the Caspian Sea region as it also weakens the fledgling role Turkey had begun to play as a vital hub for Central Asian energy transit.
Russian government approves Caspian gas pipeline agreement
Russia's government has approved a Caspian gas pipeline cooperation agreement with Kazakhstan and Turkmenistan, a senior government official told the president's conference with the Cabinet on Monday. The natural gas pipeline will run from Turkmenistan along the Caspian coast of Kazakhstan and onto Russia, and will pump 10-20 billion cubic meters of gas to Europe via Russia's pipeline network. Deputy Prime Minister Sergei Naryshkin said President Vladimir Putin had instructed the government to make the most of a planned working visit by Kazakh leader Nursultan Nazarbayev in order to move ahead with the implementation of the project. The deputy premier said the agreement also involved a provision on a feasibility study of the project, the implementation of which will begin in the second half of 2008. The document remains to be ratified. ""The agreement is ready for signing,"" Naryshkin said. Russia, Turkmenistan, and Kazakhstan agreed to build the pipeline in May 2007 and were to finalize it in September, but had failed to agree on the price of supplies. On November 27, the sides agreed on the price of $130 per 1,000 cubic meters of Turkmen gas. In late November, a Russian government official said the agreement would be signed by the end of this year. The pipeline is a rival project to a Western-backed trans-Caspian pipeline that bypasses Russia, currently the sole re-exporter of Turkmen gas.
Russia unaffected by Nabucco trans-Caspian gas pipe project
A trans-Caspian gas pipeline project bypassing Russia would not hurt its interests or the interests of the country's energy giant Gazprom, a deputy industry and energy minister said on Friday. "That point of view only exists in the minds of the media," Ivan Materov said. The $6 billion pipeline project is expected to link energy-rich Central Asia to Europe through Turkey, Bulgaria, Romania, Hungary and Austria. Construction is scheduled to begin in 2009, enabling the pipeline to go on stream in 2012. The official also said that Russia does not regard the Nabucco project as a rival or alternative to the South Stream project, which is designed to carry gas to southern Europe from Russia. He said gas pumped along the Nabucco pipeline would be too expensive and uncompetitive, compared to South Stream. The European Union wants the project to diversify its supply routes away from Russia and to boost European energy security. Russia's energy giant Gazprom and Italy's Eni signed a deal in late November to set up a joint venture to conduct a feasibility study for South Stream at a ceremony in Moscow attended by President Vladimir Putin and Italian Prime Minister Romano Prodi. The pipeline is set to cover over 900 km (560 miles) under the Black Sea from Russia to Bulgaria and supply 30 billion cubic meters of gas annually. Possible routes for the land section of the pipeline in Europe are still being discussed. The project is set to strengthen Russia's position as Europe's main energy supplier. The country already provides 40% of the continent's natural gas needs. Russia has sought to build direct export routes to the EU since bitter disputes with the ex-Soviet republics Ukraine and Belarus, which affected supplies to Europe. European nations have expressed concerns over growing energy dependence on Russia and sought to diversify supplies to enhance their energy security. The Russian Kommersant daily said on Thursday that Hungary's oil and gas company MOL had suggested merging at least eight gas transportation companies in Central Europe into a consortium, tentatively called New Europe Transmission System, in a bid to secure more beneficial loans, including for Nabucco.
Caspian Pipeline Deal Close
Turkmenistan, Russia and Kazakhstan will sign an agreement Thursday to build a natural gas pipeline along the Caspian Sea coast, the Turkmen government said Tuesday. The statement, on the Central Asian nation's official state Web site, came after months of uncertainty. After a preliminary agreement was formalized at a signing ceremony attended by the presidents of the ex-Soviet republics in May, the deal was stalled by disagreements on the price of gas supplies. Late last month, Russia gave in to Turkmen price demands and agreed to pay $130 per 1,000 cubic meters of natural gas in the first half of 2008 and $150 in the second half. Turkmen President Gurbanguli Berdymukhamedov and Russian Industry and Energy Minister Viktor Khristenko discussed the pipeline during talks in the Turkmen capital Ashgabat, the Turkmen state Web site said Tuesday. News that the deal will soon be sealed will likely disappoint the U.S. and the European Union, which have been lobbying for a rival pipeline to be built under the Caspian Sea, bypassing Russia. Khristenko told Berdymukhamedov the pipeline would have an annual capacity of 20 billion cubic meters, the Web site said, but it gave no timeframe. Khristenko had said in May that the figure could eventually reach 30 billion cubic meters. Russian President Vladimir Putin spoke with Berdymukhamedov by phone on Tuesday to discuss the agreement on the pipeline, the Kremlin said in a statement. It gave no date for a signing.