NEW TRANS-EURASIAN PIPELINE

Emzar Jgerenaia

Struggle for Asian oil transportation to Europe goes on. It has both economic and political characters.

On the one hand, the countries that were Russian authority and economy partners do not wish Russia to use it against them as penalty. On the other hand, it is an important source of income for their economics. It may be said that this is the fight against market monopolization (from the Russian side) that necessarily implies price optimization.
Official representatives from 30 countries visited Vilnius to participate in the Energy Conference on October 10-11 including presidents of Georgia, Azerbaijan, Poland, Ukraine, Lithuania and Latvia. Agreement on Odessa-Brodi-Plotsk pipeline construction was signed at the conference. Odessa-Brodi-Plotsk pipeline is built for diversification of energy supply. Consequently, Poland and Ukraine will be less depended on Russian energy carriers.
Due to its imperial nature, Russia is unable to put up with the loss of its influence in Eastern Europe as well as in Transcaucasia and Middle East. It counts on some communist dictators of Middle East, who remain at their positions with the assistance and support of Kremlin. They have eternal dictatorship in exchange for exclusive management of country resources. Russia punishes the countries being oriented towards NATO and Europe, tries to exclude them from international business scheme and from its market as well. The proof to this truth is the construction of pipeline via Baltic Sea to Germany and ‘Blue flow’, or a new oil pipeline on the Black sea. Construction of new oil pipeline will start next year: Novosibirsk – Bourgas – Alexandroupolis, capacity – 30 billion sq. per year and it will be continued to Central Europe.
There is also imposed Russian embargo on Poland, Estonia and Georgia. It may be considered as a resistance, a kind of struggle between Russian Federation and the West.
Although it’s not exactly so. Russia punishes these countries, not the West. It needs the western market, though there is huge eastern market- China. Still, Russia is ready to pay extra billions in order to punish the above mentioned countries for their freedom, for leaving Russian orbit. It is natural, that the issue somehow concerns Western Europe as well, as Russia rules not only price establishing, but also starts giving political orders.
For example, former President of France supported Russia’s imperial policy towards Georgia by not supporting Georgia’s integration to NATO.
The government of Poland headed by Kaczynsky started to work on a new pipeline project. On March 30 Lech Kaczynsky visited Azerbaijan and received the promise from Aliyev that he would support new project and take part in Energy Summit.
On April 6, Kaczynsky visited Kazakhstan, where negotiations with President Nazarbayev were too hard. Kazakhstan was not against to supply Poland with oil, but only via Russia. Kaczynsky’s attempt to convince Kazakh President to diversify energy resources supplies and build oil pipeline passing Russia, failed. Although Kaczynsky still hoped to achieve Kazakhstan` s consent with assistance of the West influence.
Besides, Nazarbayev has elections ahead and he needed support from Russia because 45 % of population there is Russian.
On April 16, Kaczynsky visited President of Georgia and then president of Ukraine to discuss the same issue. Of course he gained full support of the countries.
The consequence of the negotiations was the meeting of three countries’- Georgia, Azerbaijan and Ukraine – presidents in Poland, Krakow on May 11 at an Energy Summit at an agreement on new oil pipeline. President of the republic of Lithuania Valdas Adamkus joined the countries. It is natural Nazarbayev didn’t attend the meeting. He was hosting President Putin. Well, it was not surprising. Deputy Minister of Energy and Resources Kiinova was representing Nazarbayev. She declared that Kazakhstan was discussing yet different versions related to natural gas and oil transportation to Europe. Besides, new projects: Tengi- Novorossiysk (64 million tones per year) and Atyrau-Samara (25 million tones per year) are launched.
The basic points of the summit agreement included approximate direction: Baku (Azerbaijan) -(Georgia) Poti or Khulevi, Odessa–Bordi. Then there were two versions: directly to Plotski or passing along Ukraine –Poland border to Plotski.
Pipeline would pass 650 kilometers on the Black Sea bottom on the territory of Georgia, strong pumps would be placed in Poti, price of which approximately includes USD 350 -358 million. For pumping out gas or oil by oil pipeline placed in 200 meter depth. The project like this are too expensive. It was first time realized by Russia while “blue flow” construction –lied two pip-lines, with length of 900 kilometers to the direction of Turkey and approached 16 million sq. Meters strength per year, more was unable because of technical conditions. . Italian specialists and firms worked on the project, price of which is not clear till today.
The project has its positive side –pipeline corridor already exists in Georgia. It would be better to built it near Azerbaijan – Baku–Ceyhan and Baku–Supsa. Odessa –Borstki already works. As for Plotsk, there is a 350 km oil pipeline to Gdansk, port of Poland, and in Ploutsk 16 million tones oil producing factory (Plotsk is beautiful historical city, 100 kilometers far from Warsaw. It` s history dates back from X century, but today it known as Russia–Europe oil pipeline linking center –“Druzhba”. Administrating controller ` s offices are located there.
The summit decided to ask EU to maintain the financial support of the for project-–500 million dollars. New rout: Azerbaijan –Georgia –Ukraine –Poland was enrolled in the Project list At Vienna Energy Forum together with Nabucco in May of the current year.
Minister of Economics of Poland at the meeting with us declared that this is going to be a magistral of an utmost importance. The following should be implemented: Creation of a consortium, being an operator of the pipeline. Determining shares in the consortium. According to the Minister, on September 26, before the Vilnius summit, Tbilisi would host the workshop of Energy Ministers. In addition, the rout of a pipeline will be confirmed. Project expenses will depend on that. The minister also added, that in order to involve Western transnational companies – BP, Shell and others in the project, business proposals and investment project should be worked out. The project on participants’ shares in the consortium was created. The project will be discussed in Vilnius in October.
(It is known, that the share of Lithuania will be 1%. Lithuania’s participation is important for Poland for several reasons: the country purchased the oil producing factory in Lithuania, which Russia had planned to buy. Because of that there were constant oil supplying problems. Therefore, the factory will be constantly supplied).
Project funding issue will be solved. October will be the date of birth of a new Trans European oil pipeline, the cost of which, according to our calculations, will approximately be USD 3 billion and the length 2.5 thousand kilometers.