Turkey faces tough task in energy as political map of Caucasus redrawn

Russia's message in the five-day clashes in the Caucasus was clear: The region is still the backyard of Moscow, which is the main actor that would ensure the energy supply security for Europe.  Â

 

In other words the sudden spark in the conflict that brought Georgia to its heels, reasserted Russia's claim as the dominant force in the region, and dealt a blow to the U.S. prestige.

 

This conflict came at a time when Turkey started sending signals that it wants to boost cooperation with its top gas supplier Russia.

 

It is almost certain that this incident would change the balance of power and the political landscape of the region. This change, on the other hand, has significant importance for Turkey as the officials intensified their efforts to take part in this wind of change.

 

KEY ENERGY TRANSIT COUNTRY

Turkey had sped up its efforts to host crucial energy routes that feed the West with pushing for new pipeline deals and inaugurating the planned ones, a policy seen by Ankara as key to promote the country's EU membership bid.

 

The country is seen as an alternative for Russian natural resources and a gateway of the Caspian energy sources to Europe. As Turkey does not possess rich hydrocarbon reserves of its own, almost all of these routes come from unstable countries such as Iran and Iraq. Georgian President Mikhail Saakashvili’s ill fated offensive on South Ossetia added Georgia into this list.

 

The lack of relations between Armenia and Turkey forced Ankara to push for routing the flow of oil and natural gas from Azerbaijan, through Georgia and into Anatolia.

 

The result has been the Baku-Tbilisi-Ceyhan (BTC) oil pipeline, which runs from the Caspian to the eastern Mediterranean and the Baku-Tbilisi-Erzurum (BTE) natural gas pipeline, which runs parallel to BTC as far as eastern Anatolia.

 

Turkey backed four European countries on the 7.9-billion-euro Nabucco pipeline project planned to carry gas from the Caspian and Iran to Europe from 2013 to lessen Europe's dependence on Russia.

 

Also on the table is a project called the "Mediterranean Line", which envisages carrying fiber optic cables, water, electricity and Russian gas and oil through a multi-purpose pipeline from Turkey to Israel under a 2-5 billion euro deal.

 

TURKEY-RUSSIA RELATIONS IMPROVE

During the recent clashes the BP-led consortium halted the gas flow through BTE pipeline. BTC seems to have survived from the conflict as it was already closed due to an explosion that took place along its Turkish section early August.

 

Russia is once more within striking distance to control all the export routes for the oil and gas of the Caspian basin. In fact it was this monopoly that paved the way for the Georgia-Turkey pipeline, carrying Azeri oil from Baku to Ceyhan in Turkey.

 

The ability of the Georgians to protect and secure that pipeline is now clearly in question, and proposals to extend and increase the capacity of the pipeline will now have to be reconsidered.

 

This conflict came at a time when Turkey started signaling that it wants to boost cooperation with its top gas supplier Russia, ending a frosty period marked by differences over the Nabucco pipeline, an ambitious project aiming to bring gas from the Caspian to Europe.

 

Turkey gets most of its gas, 68 percent of 2008 demand of 38 billion cubic meters (bcm), from Russia's Gazprom under three long-term deals.

 

Turkey and Russia had a decade-long lull in economic relations after Ankara blamed Moscow for selling gas to Ankara at more expensive rates than to other buyers.

 

They were also at loggerheads on the Nabucco project. Russia had said any pipeline project without its gas was doomed to fail and challenged Nabucco by broaching the South Stream project, which plans a pipeline to Bulgaria and Italy from Russia via the Black Sea.

 

The two countries agreed to set up a joint company to run Turkey's urban gas grids as well as to build an underground gas storage facility in central Turkey and have held talks to renew a gas contract expiring in 2011.

 

Also Russia, Turkey and Israel agreed to work on the "Mediterranean Line" project, which could later be extended as far as India.

 

ENERGY POLITICS

As Turkey plays its card to increase its role as an energy transit country, the stakes are higher. Ankara now has to define a new balance for its relations with its traditional allies in the West and its emerging energy partner, Russia.

 

The task is becoming far more difficult given the recent international row with another regional energy player, Iran, over its nuclear program. Turkey and Iran had failed to agree on the deal to build a new pipeline as some speculate the failure was to avoid further unease with the U.S.

 

Turkey should develop a new strategy in the new grand chess board with longer term planning if it is to maintain the balance and not jeopardize its aim of becoming a key energy transit country.