East of Europe: The End of South Stream and the New Uneasy Strategic Triangle
The end of the South Stream project has been seen as a substantial shift in European energy governance. Its strategic implications, however, go way beyond energy. It signals the intensification of a tripartite relationship in the European Union’s eastern neighborhood – the relationship between Russia, Turkey, and Azerbaijan. Most likely, this strategic triangle will be a very uneasy one. For Turkey, it will present new strategic challenges in terms of balancing its partnerships with Russia and Azerbaijan. What is more, the envisaged Russian-Turkish pipeline might further complicate Turkey’s already strained relationship with Europe while making it increasingly dependent on European legislation.
The Russian-Turkish pipeline, announced by the Russian President Vladimir Putin as an alternative to South Stream in early December, could significantly alter patterns of energy trade in the region. So far, the major gas project in the so-called Southern Corridor was the Trans-Anatolian Pipeline (TANAP). In 2011, Turkey and Azerbaijan agreed to build this pipeline to bring 16 billion cubic meters of natural gas (bcm) per year from Azerbaijan to Turkey, 10 bcm/y of which will be shipped further to Europe by the connecting Trans-Adriatic Pipeline (TAP). TANAP and TAP might well be extended in the future. The new Russian-Turkish pipeline is envisaged to bring 63 bcm/y to Turkey of which 50 bcm/y are expected to also go to Europe.
These developments have clear strategic implications.
First of all, they would make Turkey a less interesting partner for Europe. The country has long been central to Western energy policy in the region for a very specific reason. As the energy expert Richard Ericson puts it, Turkey is sitting on the only transit route substantially free of Russia. The envisaged Russian-Turkish pipeline threatens to reduce Turkey’s comparative advantage by tying Russia and Turkey even closer together. As a consequence, Europe’s approach to Turkey might cool down, and the country could find itself stranded in the midst of an intensifying strategic triangle with Russia and Azerbaijan.
A second implication concerns the Russian-Azerbaijani relation. Azerbaijan, just as other post-Soviet states such as Georgia, has continuously struggled to defend its sovereignty against Moscow’s imperialist aspirations. With the new Russian-Turkish pipeline, Russian gas would directly compete against Azerbaijani gas both in Turkey as well as in the rather weak Southern European markets. From the Russian perspective, this situation provides a new means to put substantial political and economic pressure on Azerbaijan. It provides a handle to make Azerbaijani energy exports less lucrative by pushing down gas prices on target markets.
From this results a third strategic implication. Turkey’s foreign policy falls at risk of becoming inconsistent. The country has cultivated a strategic partnership with Azerbaijan for several years. Pipelines and cross-investments in the energy sector constitute the backbone of this partnership. More recently, Turkey has also increased efforts to approach Russia politically. The new pipeline plan represents a new quality of this strategic relation with Russia. However, being a strategic partner of both Azerbaijan and Russia is not an easy task, given the continuous hostility between the two. The new Russian-Turkish pipeline threatens to make Turkey the site of potential future hostilities. Under these conditions, it is questionable if strategic partnerships to both could be maintaned over the long run.
To elaborate on a fourth strategic implication, we need to go back to the Turkish-European relation once again. While Turkey might become less attractive for Europe as a political alternative to Russia, the new volumes that might be generated by the Russian-Turkish pipeline would make it more likely for Turkey to become an energy hub. As Turkey’s Energy Minister Taner Yildiz highlighted, Turkey aspires to be more than a transit country for these new volumes. As a consequence, Turkey would have to play a role in selling them. And for selling them, infrastructure is needed. This infrastructure is not only made up by pipelines but also by legal infrastructure in energy trade. In the medium term, therefore, the Russian move might push Turkey to reinforce its recently flagging efforts to adapt European energy legislation. This legislation is the quickest and most promising way to build up the legal infrastructure that will be needed to become an effective and efficient energy hub.
Finally, both the new Russian-Turkish pipeline as well as TANAP/TAP are envisaged to supply Southern European markets. These markets are thus looking forward to times of massive oversupply. This might, in a rather ironic twist, help to reincarnate plans to build a pipeline similar to Nabucco West in order to bring gas from Southern Europe to the less well-supplied markets in Eastern Europe. The proposed Russian-Turkish pipeline, in other words, might result in the reincarnation of a project the sabotage of which was arguably the main aim of the South Stream project.
Jörn Richert
Jörn Richert is an Assistant Prof. for Energy Governance at the Center for Energy Innovation, Governance and Investment (EGI) at St. Gallen University