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Warsaw energy summit’s bleak prospects
10/05/07
MOSCOW. (Igor Tomberg for RIA Novosti) –

The energy summit scheduled to take place in Warsaw on May 11-13 makes little sense. Poland, Ukraine, Azerbaijan, Georgia and Kazakhstan, the so-called Five, planned to agree on the construction of the Odessa-Gdansk gas pipeline and other routes of energy supplies bypassing Russia.
About two weeks ago Polish President Lech KaczyÓski and his Ukrainian counterpart Viktor Yushchenko said it was pointless to discuss a new gas route without Kazakhstan and Azerbaijan. Now Kazakhstan is going to abstain from the summit.
This became clear when President Vladimir Putin’s travel schedule for May was announced. On May 10, the president arrived on a visit to Kazakhstan, and on May 11, he will go to Ashgabat to attend a tripartite summit of Russia, Kazakhstan and Turkmenistan.
Evidently, Russia’s counteroffensive on the energy front has achieved its first objective. Nursultan Nazarbayev, whom Lech KaczyÓski personally invited in March to visit Poland, decided not to go. The Five have turned into a weak Four because all plans of the European strategists are based on Central Asian energy resources. The Azerbaijani leader’s presence will allow the energy summit’s organizers to save face, although Azerbaijan is hardly a serious oil-and-gas player.
Nevertheless, the coincidence of the two summits is symptomatic. Future Kazakhstan, Turkmen and Uzbek gas has been a subject of fierce fighting in the past few months. So far, Russia has managed to keep control over the bulk of gas production and gas routes in Central Asia. The change of power in Turkmenistan after President Saparmurat Niyazov’s sudden death in December of 2006 has not yet affected Russia’s interests. The new Turkmen leaders have reaffirmed their commitment to the September 2006 contract which allows Russia to buy most of Turkmen gas in the next 25 years. Ashkhabad’s large-scale plans to export gas to Iran, China and India are depriving the European Union of the hope to diversify its gas imports by dealing with Central Asia in the foreseeable future.
Russia has scored one more point on the geopolitical scene when Kazakhstan has refused to take part in the Trans-Caspian project. Statements to this effect were made by Nazarbayev and other high-ranking officials. This project provides for the construction of a pipeline across the bottom of the Caspian Sea with an annual capacity of 30 billion cubic meters of gas, which could be transported to Europe through the Baku-Tbilisi-Erzurum and Nabucco pipelines. The United States suggested the Trans-Caspian project in 1996, but Gazprom adamantly objected to it because the pipeline bypasses Russia. As it turned out, Kazakhstan has not accepted this idea, either.
Putin’s Central Asian tour is designed to bury the Trans-Caspian project once and for all, and to map out alternative gas routes. Russia would prefer to upgrade the existing Central Asia-Centre gas pipeline with outlets to Ukraine and further to Western Europe. The pipeline goes around the Caspian Sea via Turkmenistan, Kazakhstan and Russia. The three countries are ready to discuss a gas transportation consortium. The existing capacities can pump no more than 60 billion cubic meters of gas, and the proposed consortium will fix this problem and balance out investments.
Central Asian participation in the consortium will considerably albeit gradually weaken Russia’s monopoly on gas exports from the region. The status of partners means equitable division of profits. One of the goals is to expand and modernize the existing gas networks, on which Central Asian countries have insisted for a long time.
Transfer of tripartite energy ties to a new level will make it possible to resolve these and other problems such as the terms of associated gas supplies from the Karachaganak condensate and gas field to the Orenburg gas processing plant, or expansion of Kazakh oil exports via Russian transportation capacities. If Kazakhstan joins the Bourgas-Alexandroupolis pipeline on acceptable terms, it may lose much of its interest in the Odessa-Brody project and the like.
During the current tripartite talks, Vladimir Putin will try to convince his Turkmen and Kazakh colleagues of the need to establish control over exports of energy resources to the EU. Otherwise oil and gas consumers will dictate their terms to energy producers. If Putin succeeds in persuading his colleagues to consider an alternative pipeline, Moscow will substantially enhance its geopolitical positions in the region. The gas transportation consortium with Uzbekistan’s potential involvement may be the first practical step towards the formation of the CIS energy alliance about which the Russian president has been talking since 2002.

Dr. Igor Tomberg is a senior research fellow with the Centre for Energy Studies at the Institute of World Economy and International Relations, the Russian Academy of Sciences.
The opinions expressed in this article are the author's and do not necessarily represent those of RIA Novosti. –0-