June 28, 2016 6:45 am JST

Russia on edge as Europe eyes other gas sources

MASANORI TOBITA, Nikkei staff writer

TOKYO -- Russia is growing nervous over European plans to build a massive natural gas pipeline all the way from the Caspian Sea, part of the region's attempt to curb its dependence on Russian gas amid the Ukraine crisis and other political differences.

On May 17, representatives from major European nations attended a ceremony in the Greek city of Thessaloniki to celebrate the start of construction of the Trans Adriatic Pipeline, or TAP. Russian President Vladimir Putin visited Greece about a week later, likely to check on plans to create a separate route for delivering Russian gas via Greece and Italy to the rest of Europe.

Putin's decision to visit Greece shortly after the TAP ceremony reflects growing Russian concerns over the 900km pipeline, which will run from the Greek-Turkish border to Italy.

Major artery

The TAP will eventually be linked to the Trans-Anatolian Natural Gas Pipeline, or TANAP, which is currently under construction across Turkey, and then to the South Caucasus Pipeline connecting Turkey and Azerbaijan. Once completed, the three links will form the Southern Gas Corridor, bringing natural gas straight from Azerbaijan to Europe.

The amount of Azeri gas reaching Europe is only expected to reach 5% of total Russian shipments to the region. But reserve-rich Iran could funnel gas from its existing pipeline in Turkey to TANAP and TAP once they are completed. The Southern Gas Corridor could become a major artery for Central Asian and Middle Eastern natural gas headed to Europe.

Russia has been attempting to curb these developments. Russian Foreign Minister Sergey Lavrov has voiced concerns of the impact another European Union-led plan to construct a pipeline across the Caspian Sea will have on the region's interests. The proposed line would link Turkmenistan, which has the world's fourth-largest natural gas reserves, to TANAP in Azerbaijan, bringing vast amounts of Turkmen gas to Europe and loosening Russia's grip on its largest market.

Moscow has built up pressure on other Caspian nations, and state-owned gas company Gazprom abruptly cut imports from Turkmenistan by about 60% in 2015. The move only fueled distrust in Russia and led Turkmenistan to seek other buyers for its fuel. Even Turkish President Recep Tayyip Erdogan appears supportive of the trans-Caspian pipeline. Yet Russia maintains that all nations bordering the sea, including itself, must first agree to the link, and shows no signs of budging.

Not giving up

Russia has not given up on sending gas to Europe by bypassing Ukraine, even after it abandoned the South Stream pipeline project through Bulgaria in 2014. The TurkStream project fell apart last year when bilateral relations with Turkey soured after a Russian jet was shot down. But Moscow is still pursuing a possible pipeline with Greece and the NordStream 2 project to Europe across the Baltic Sea.

During a June visit to Russia, Israeli Prime Minister Benjamin Netanyahu said that the "doors are open" for any company, including from Russia, to take part in developing the massive Leviathan gas field off the coast of Israel. Putin had asked Netanyahu during the latter's previous visit in April whether Gazprom could participate in the project.

Israeli media accused Russia of trying to block the country's exports, and warned that Moscow could use the project as an excuse to demand the passage of Russian warships through the Mediterranean Sea. Putin has met Netanyahu four times in the past year and called for an anti-terror partnership in an attempt to woo Israel.

But Israel-Turkey ties are on the mend, after cooling in 2010 over an Israeli raid on a Turkish flotilla. The two countries are reportedly close to a deal that would send Israeli gas to Turkey, a Russian rival. And Europe is receiving more fuel shipments from Qatar. The region is steadily cutting its dependence on Russian gas, adding to Putin's frustrations.

Russia's big challenge used to be the Nabucco pipeline, an older proposal by Europe for sending Caspian gas into the region. The project failed to attract corporate interest and has since been replaced by TANAP. But Putin still seems to be battling the ghosts of that failed pipeline named after a despotic king from a Verdi opera.

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