Russia’s actions against the Southern Gas Corridor in the European countries and Turkey, its impacts and means of action in this directon
Elnur Najiyev, Scientific worker at the Institute of History named after A.A. Bakikhanov of ANAS
Within the framework of the Shah Deniz Stage-2 project, the projects involving gas transportation from the Caspian Sea to Europe are known as – existing South Caucasus Pipeline Expansion (SCPX), Trans Anatolian Natural Gas Pipeline project (TANAP) and The Trans Adriatic Pipeline (TAP) – the Southern Gas Corridor (SGC). The most important step towards the realization of this project was the signing of the Joint Declaration on the creation of routes for gas transportation from the Caspian Sea to Europe by President of the Republic of Azerbaijan Ilham Aliyev and President of the European Commission Jose Manuel Barroso in Baku on 13 January 2011. The next year, an agreement was reached on the construction of the TAP pipeline between Turkey and Azerbaijan. Then, with the signing of the TANAP deal between the President of the Republic of Azerbaijan Ilham Aliyev and the Prime Minister of Turkey Recep Tayyip Erdogan, more decisive steps have been taken to implement the SGC project. On September 20, 2014, the foundation of the SGC was laid. This project went down in history as the “Contract of 21st Century”. The transportation of natural gas through the project is planned to be delivered to Turkey by mid-2018 and to Europe by the beginning of 2020. As part of this project, with the SCPX activities, the pipeline will be exporting up to 23.46 billion cubic meters of gas annually after its launch in 2018. According to the SGC project, export opportunities of natural gas resources of Central Asian countries, Egypt, Iraq and Iran to European countries are also highly appreciated. 
There are similarities and differences in the approaches of Azerbaijan, Turkey, Russia, Iran and the West to the realization of the SGC. The analysis of this point will allow to give more objective results on the activities of the Russian Federation against the SGC, its influences and means used in this direction.
Azerbaijan’s position is to build mutually beneficial cooperation with all countries in the field of energy supply (with the exception of Armenia, of course). Azerbaijan also cooperates with Russia’s Gazprom and exports gas to Russia. As President Ilham Aliyev said in his speech, Azerbaijan supports the SGC project, because “It is a project that brings huge incomes and political dividends to our country … We will carry out this project jointly with neighboring countries and partners”. By supporting this project, Azerbaijan will not forget its neighbors, such as Russia and Iran. According to the position of Azerbaijan, “Europe is a huge market that will be able to get reserves both in Russia and in our region, where no competition is possible”. The dynamics of the phenomenon of the events are quite different. Holding a session on the new prospects of the Southern Gas Corridor on 29 May 2013 and discussions in this regard within the Azerbaijan-US Forum could not please Russia. Participation of foreign ministers of Turkey, Georgia and Greece along with Azerbaijan at the event held on 25 September 2013 gave a further warning to Russia. The increasingly active involvement of Caucasian countries such as Azerbaijan and Georgia in the project sponsored by the United States was directly contrary to Russia’s interests. However, SOCAR officials tried to calm Russia by declaring the opinion that “The volumes of Azerbaijani gas to Europe will not be as high as it will compete with Russia”. Of course, they were not enough. Because the European countries expressing their hopes for Caspian gas in recent years without undermining the name of Azerbaijan, bought Russian gas for $ 341 in 2014. But they were buying Russian gas for $ 500 in 2008-2009. The Southern Gas Corridor will reduce these prices by 15%. Today they are expressing opinions such as “Azerbaijan does not prevent Russia from exporting its natural gas to Europe”  and thereby striving to justify that there is no point in colliding with the interests of the Russian Federation. But this justification is not enough.
Today, Russia is one of the main supplier of gas to Europe.  In particular, Bulgaria and Hungary depend on Russia for more than 90% of gas supplies. In this case, the realization of the SGC is regarded as a signal in this direction even though it is not considered as a direct threat to Russian interests, according to the Russian officials. So, in 2014, RusEnergy analyst, Mikhail Krutikhin noted that, “With the joining of gas supplies not only Azerbaijan, but also Iran, Turkmenistan, even Iraqi Kurdistan, the annual export potential of the gas will exceed 30 billion cubic meters, which will be a serious competition for Russian gas supplies”.  The expert said that, the SGC meets the interests of European consumers as it offers a real diversification of supply sources and simply making its name forced the Russian market to reduce its gas price. In this case, the question arises: “Does Russia take any measures against the realization of this project?”. One of the proposals made for existing competition was “to build oil and gas processing plants, sell finished products and prepare another economic project”. Apart from this proposal, Russia has made more consistent steps, and on December 1, 2014, Russian President Vladimir Putin offered TurkStream natural gas pipeline project during his visit to Turkey. This project was formalized by an intergovernmental agreement between Turkey and RF on October 10, 2016 in Istanbul. It should be noted that this project represents a new gas pipeline with an annual capacity of 15.75 billion cubic meters, extending from the Russian Federation to the Black Sea Maritime Terminal of the Turkish Republic, and then to Turkey and neighboring countries. The main objective of the project is primarily to supply Turkish consumers and, on the other hand, South and South Eastern Europe with natural gas resources. On May 7, 2017, Gazprom began the construction of the TurkStream gas transit in the Black Sea began in the Russian part of the sea. In this project, Southeast European countries, such as Serbia and Greece demonstrate special activity. For example, speaking at the forum titled “One Pole – One Way”, held in Beijing on May 15, 2017, Serbian President A.Vucic stressed the need to expand gas imports from Russia to 4-5 billion cubic meters to his country and the importance of the TurkStream project. Greece’s then energy minister, P.Lafazanis, said in his speech: “The prospect of establishing a gas pipeline to be built in Greece is concerned “the European and trans-Atlantic circles”… The US opposes a new gas pipeline instead of the South Stream. We take into account their reaction, but we do not change our position”. As a result, on June 18, 2015, a memorandum of cooperation was signed between Russia and Greece on the operation and construction of the TurkStream gas pipeline. According to A.Miller, Chairman of the Board of Public Joint Stock Company Gazprom (PAO), regarding the status of the TurkStream until April 30, 2018: “The construction of the first section of the TurkStream has been completed … 1161 kilometers of pipelines have been laid on two lines of the pipeline, which is 62% of the total length of the seafront”.  It turns out that Russia directly supports the Southern Gas Corridor, as well as the Nord Stream-2 project, the TurkStream project and is trying to reduce the importance of SGC in this project. But the more advantage is given to the TurkStream project. It should be noted that Nord Stream-2 is a project that is planned to be at the level of 55 billion cubic meters per year for 2019, providing the transportation of Russian gas to Germany via the Baltic Sea with a length of 1224 km. But its prospect looks low in comparison with the “TurkStream” project. Russian Foreign Ministry spokesman Sergei Lavrov made it public on May 10, 2017. Countries that want to take advantage of the TurkStream project still have Serbia, Hungary, Bulgaria and Greece expressing their position. Over time, Russian gas is expected to increase its customers through the TurkStream. The biggest consumers of this project are still Turkey. It should be noted that the volume of gas imported to Turkey from Russia in 2016 amounted to 24.7 billion cubic meters.  In general, there is an increase in Russian gas demand in 2017 due to the TurkStream project. In 2017, the highest indicator was recorded for Russia, and the volume of gas exports to Europe, including Turkey, was 192.2 billion cubic meters .
Along with Russia, Turkey’s position on the SGC and the importance of this corridor on the Russian-Turkish relations and its importance in comparison with the TurkStream are also quite interesting. Turkey, which imports about three-quarters of its energy from abroad, is one of the countries with the highest percentage of energy reserves. Today, 57.9% of Turkey’s natural gas needs are paid by Russia. At present, Turkey is trying to reduce its dependence on Russian gas by playing a transit country in the SGC and also demonstrates a positive position in the TurkStream project to avoid dissatisfaction with Russia. The opinion of the General Director of TANAP Saltuk Düzyol explains Turkey’s position on this issue: “The more pipeline systems passes from Turkey, the more it will serve as a kind of security gate, insurance in Turkey’s energy needs. Such investments will allow Turkey to get cheaper gas. Because a market that will compete gas with gas will emerge”. Turkey will be the winner again in this position. Indeed, it is important for Turkey to make a profit by justifying its ability to meet its gas demand at a cheaper price and contributing to the formation of a market where gas will compete with gas, as well as to evaluate the opportunity to participate as a transit country in various projects. Therefore, it is one of the main targets for Turkey to be in any of the energy projects.
As regards Iran’s position on the SGC, on April 13, 2015, this information was published in the news of the Iranian Students Information Agency: “Iran’s Foreign Ministry spokesman Mohammad Javad Zarif says that Iran has the same potential for Russia’s gas needs in Europe. But Zarif said that Tehran does not intend to compete with Moscow on this front”. Of course, the only factor that hinders this is not the Russian-Iranian relations. Iran generally can not join the SGC in current political conditions, as there are sanctions against Iran in this area. Energy analyst Ali Hussein’s analysis is very interesting. According to his predictions, the use of energy is gradually decreasing in Europe compared to Asia and continues to grow in China and India. Therefore, gas exports to East Asia are more favorable for Iran. According to the analyst, on the other hand “the European gas market is in the hands of Russia, and Iran will face Russia in the European gas market”. In this case, we should appreciate that we are ready for such a choice. On the other hand, this issue can be used in the negotiations with the Russia and give them more opportunities to expand our markets in East Asia in exchange for not entering the European market”. Generally speaking, Iran’s joining to the SGC does not seem to be realistic under existing political conditions. The sanctions that we mentioned above and Russian factor prevent it.
When we look at the position that the West (USA and European countries) demonstrates against Russia’s actions towards the SGC, we see a close relationship with Turkey. So in the best case for the West to get rid of the Russian gas monopoly is trying to achieve diversification. Russia’s actions against the Southern Gas Corridor are felt more frequently in the manipulation of gas prices in Europe. In an article published in the American Safety Project, there are interesting comments on Russia’s position on the European energy market, Nord Stream-2 against SGC, and accelerating the implementation of TurkStream projects. The first point of the article is that Russia has 34% share of the EU’s natural gas needs in the energy market. Russia is trying to ensure its political and economic interests in Europe by increasing and reducing its gas supplies. In the center of these price changes, Russia’s relations with Ukraine stands. Today, Russia’s rapid deployment of the Nord Stream-2 project will strike the SGC, and also help Russia to get rid of the Ukrainian factor in the distribution of gas to Europe. Because Ukraine is now the main distributor of Russian natural gas in Europe. The position of the United States to preserve the current situation is to prevent Russia from implementing new projects. The United States tries to avoid losing its dominance in a strategic location like Eastern Europe and limiting Russian power in the energy market. The United States does not consider this step unreasonable. The website American Security Project provides such information: “The European states are afraid of the ongoing tension between NATO and Russia, as NATO and Russia are holding large-scale military exercises in Northern Europe in the summer and autumn of 2017. Nevertheless, Russia’s military games are accompanied by the strengthening of diplomatic activity to expand Russia’s influence and ensuring Russia’s leading position in the European energy market”. Today Russia is not only trying to keep energy markets in Europe but also to prevent NATO’s expansion towards the East. Russia has sought not only to increase the economic impact in the Black Sea and the Mediterranean Sea, but also to target to strengthen military checkpoints with the implementation of the projects from North to South. From this point of view, Russia is still making peaceful efforts to prevent the SGC from happening.
In general, the mentioned opinions can come to the following conclusions:
- The emergence of the Southern Gas Corridor project supported by EU today has prompted Russia to pay more attention to its export projects. However, until this project, Russia has applied other ways to obstruct EU-supported projects.
- The TurkStream project, proposed as a rival to the Southern Gas Corridor and rapidly executing its implementation, has actually led the Russians to diversion. Because Europe created such situation that even the United States offered its own gas to save Europe from Russian energy independence.
- In addition to the TurkStream project, in April 2018, Russia made a decision to strengthen the naval navy in the Caspian Sea to demonstrate its ability to neutralize the source of the Southern Gas Corridor project. However, today, the development of the Azerbaijani-Russian relations and the fact that Azerbaijan is part of various international projects, unlike Ukraine and Georgia, constitutes its security insurance.
In the present case, even though, the implementation of the SGC does not pose any threat to Azerbaijan, today the involvement of Iran and Turkmenistan in this project will allow to demonstrate a more robust position in front of Russia. From this point of view, West’s more compromise approach to Iran, and its conditions for involvement in this project will help eliminate the monopoly of Russia in Europe as well as to ensure the security of Azerbaijan in a diversified environment.
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