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Published 16 May, 2007 12:00am

Europe, US sidelined in Caspian deal

LONDON: Europe and the United States will have to get used to Russia as an energy superpower after Moscow gained the upper hand in a scramble for Central Asian gas.

Russia’s pipeline agreement with Turkmenistan and Kazakhstan on Saturday reinforces Russia’s grip on energy flows from the Caspian and casts doubts on plans by Europe and the United States for supply routes free of Moscow’s control.

“It is a further reminder that Russia maintains a strong upper hand in the competition for Central Asia’s gas exports and that alternative routes face considerable hurdles,” said Tanya Costello, an analyst at Eurasia Group.

US Energy Secretary Sam Bodman described the Caspian gas pipeline agreement to carry Central Asian gas via Russia as “not good” for Europe.

Russia’s top adviser on European Union affairs Sergei Yastrzhembsky said on Tuesday the agreement was positive for Europe by creating more energy supply routes.

Russia has elbowed Western firms aside to assert control of big energy projects on its territory, such as Sakhalin in the Far East and the Shtokman gas field in the Arctic.

It has disrupted gas and oil supplies in disputes with Ukraine and Belarus that affected flows to Western Europe and caused worries in the European Union over energy security.

Moscow has plans to divert its pipelines away from what President Vladimir Putin calls “parasite” transit states, even though it is now seeking to bolster its status as the custodian of oil and gas in transit from Central Asia.

But Europe will have to get used to the fact that it is reliant on Russia.

“Russia is a major supplier of gas to Europe, you can’t get around it,” said Ron Smith, head of research at Alfa Bank in Moscow. “Even an independent pipeline doesn’t change the basic situation that Russia supplies a quarter of Europe’s gas.”

Turkmenistan's president, Kurbanguly Berdymukhamedov, did leave the door open for a gas pipeline under the Caspian Sea, the trans-Caspian project the United States has pushed for to reduce Moscow's hold over former Soviet states and Europe.

But this sub-sea pipeline faces technical, environmental and political obstacles, and competition from Russia for gas supplies.

“Russia would never give its approval to such a pipeline being built,” said Julian Lee, senior energy analyst at the Centre for Global Energy Studies.

A trans-Caspian pipeline would get gas to Europe through Azerbaijan, Georgia and Turkey.—Reuters

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