Beyond Turkey: The EU's Energy Policy and the Southern Corridor
The European Union is seeking to diversify its natural gas supply and intends to establish a new supply route in addition to the three existing ones, from Norway (Northern Corridor), Northern Africa (Western Corridor) and Russia (Eastern Corridor). The fourth, Southern Corridor will make it possible to have natural gas shipped from the Caspian region and the Middle East to customers in Southeastern Europe and the EU. Turkey will be the key transit country for these deliveries via a multitude of pipelines, including Nabucco. Although several pipeline projects have reported development progress, it remains uncertain whether and when they will be able to secure sufficient gas supplies so that their realisation can commence.
The Friedrich-Ebert-Stiftung (FES) and the German Council on Foreign Relations (DGAP) organised an international experts’ meeting on this topic in Berlin in June 2010. The participants had political, business and academic backgrounds, and came from EU institutions and member states. Turkey, Azerbaijan and Russia were also represented. The meeting followed a preceding conference on energy relations between the EU, Russia and Turkey, with the aim, subsequently, of focusing on Turkey’s role in EU foreign energy policy and also of looking beyond Turkey to potential resource bases for the Southern Corridor. We are delighted to be able to present this collection of five papers in order to share part of the discussion and further considerations with a broader public.
Brendan Devlin and Katrin Heer start by explaining the background for the European Commission’s initiative to establish a Southern Corridor, pointing to the EU’s increasing demand for natural gas imports and the lack of access to the world’s largest gas reserves in the Caspian region and the Middle East. While the EU strategically needs all the different pipeline projects within the Southern Corridor, the Commission supports Nabucco in particular since it is the only project that provides for large volumes of gas, as well as significant diversification of sources along one continuous trunk line. Finally, they highlight the Commission’s support in the coordination of gas purchases, as well as in legal and financial matters, since companies relying on market forces alone would not be able to open the Southern Corridor.
Ömer Fatih Sayan draws attention to Turkey’s interest in deepening energy cooperation with the European Union, which so far remains below its potential due to the political blockage of accession negotiations, including on the energy chapter. Opening the energy chapter would accelerate Turkey’s adoption of EU energy law and thus help in developing the Southern Corridor, which Turkey supports as a reliable partner and transit state. Since Turkey, unlike the EU, has already established energy relations with most of the potential supplier countries to the Southern Corridor in the Caspian region and the Middle East, Sayan elaborates on the Turkish experience with Azerbaijan, Iran and Iraq, among others. Turkey remains interested in meeting its increasing gas demand with purchases from Iran, although Iran, due to domestic needs, slashed its gas deliveries twice (which Turkey was able to replace with gas from Russia).
Ingilab Ahmadov expresses the wish that the EU would show more commitment on the legislative, financing and political levels, including offering more competitive prices, where needed, in order to win over the Caspian countries. This applies especially to Turkmenistan, where the EU’s chances of tapping the gas reserves are decreasing, since China has already managed to build a pipeline to Turkmenistan. Providing detailed insight into Azerbaijani and Turkmen reasoning on whether to supply gas to new customers in the EU via Nabucco, the author states that, in contrast to the established customers in Russia, China and Iran, the EU is seen as a reliable and profitable market. Azerbaijan’s and Turkmenistan’s interest in the diversification of exports, on the one hand, increases the EU’s chances of obtaining access to their gas deliveries, but on the other hand it also ensures that the EU will only be able to attract part of them.
Mert Bilgin analyses the resource potential of Iran, Qatar, Iraq and Egypt as the most promising Middle Eastern countries with regard to supplying the pipelines of the Southern Corridor. Among them, Iran is the most strategic country as its participation in the Southern Corridor would also enable access to Turkmen deliveries, circumventing the Caspian Sea with its unresolved legal status. Their participation is, however, jeopardised by a number of impediments. While Qatar and Egypt are more likely to expand their LNG export capacities than to develop new pipeline infrastructure, Iran and Iraq face political problems, such as the international community’s misgivings about Iran’s nuclear programme, and ethnic and regional clashes in Iraq. These impediments should not prevent the EU from establishing the Southern Corridor, Bilgin argues, as building the energy corridor will rather strengthen regional stability and foster cooperation in the Middle East.
Maria Belova stresses that the Southern Corridor’s pipelines could profit substantially from Russian participation. Instead of pursuing a politicised »avoid Russia« energy policy, the EU should join forces with Russia. Both sides would benefit if Turkmen gas reached the EU via existing and new pipelines between Turkmenistan and Russia. The same applies if the South Stream and Nabucco projects were partially merged. While Russia could reduce the transit risk of its existing export pipelines, as well as reduce the high cost of the South Stream project, the EU could finally get hold of sufficient gas deliveries
from or via Russia. Therefore, she argues, a Russian Eastern Corridor and a non-Russian Southern Corridor should not be kept separate from one another simply for the sake of conceptual purity.
Establishing the Southern Corridor could significantly increase the EU’s security of supply of natural gas and accelerate Turkey’s economic and political integration with the European Union. Furthermore, the inherent need to cooperate among the countries concerned in the Caspian region and the Middle East could enhance regional stability and security in the EU’s neighbourhood. But the question remains whether these incentives, as well as the political and financial support that the EU has already provided for setting up the Southern Corridor, will prove sufficient to enable the EU to overcome the hurdles that still cast doubt on the Corridor’s realisation.
A stronger financial and political commitment on the part of the EU and its member states could boost the Southern Corridor, as could intensified energy cooperation with Turkey or managing Iranian or Russian participation. The EU and its members must decide whether to continue or, in one way or another, reconsider and strengthen their support for the Southern Corridor. In any case, establishing
the Southern Corridor will be the litmus test of their willingness and ability to forge a meaningful foreign
We would like to express our sincere gratitude to the authors and all other speakers and participants in the meeting for sharing their thoughts with us. We are also indebted to Elina Brutschin from the Institute for Advanced Studies in Vienna for her valuable support for this publication. We hope that this collection of papers will interest the reader and further the debate on the European Union’s security of energy supply.
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