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20th Jan 2020

EU clings to hopes of Trans-Caspian gas pipeline

The European Commission still believes Europe can break Russia's stranglehold on Central Asia gas supplies with a Trans-Caspian pipeline, but a new Russian deal and internal EU divisions are hampering the project.

"We're still very optimistic about this," a commission spokesman said on Friday (1 June), adding that Brussels will in the "very near future" appoint a high-level "coordinator" such as an ex-commissioner or former European cabinet minister to push the project along.

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"My gut instinct says yes [it will be built]," an EU official working on the pipeline feasibility study told EUobserver, with experts saying there is probably enough gas in Turkmenistan and Kazakhstan to feed extra volumes to Russia, the EU and even China in future.

The EU pipeline, designated as a "priority project" by EU heads of state at the March summit, is designed to link Europe - via the South Caucasus and Turkey - to Azerbaijan and Iran in the first phase. A second phase, which is crucial in terms of overall financial viability, would add a branch under the Caspian Sea to Central Asia.

The feasibility study - looking at business, engineering and environmental issues - began in January 2006 and is due to present initial findings in December 2007 with a final report by December 2008.

"This [the EU-sponsored study] gives of course a strong political signal, which often opens doors and speeds up procedures, although they are still much too slow. This effect should not be underestimated," the EU official said.

The EU for the past year has worked on a new Central Asia policy designed to pave the way for the Caspian Sea branch. The policy - to be unveiled in June - is to see EU aid double to €750 million by 2013 and a string of new EU embassies in the five Central Asian capitals.

But leading Romanian analyst Vladimir Socor says Brussels is in denial over the implications of an 11 May deal between Vladimir Putin and the leaders of Turkmenistan, Kazakhstan and Uzbekistan, which foresees major new Central Asia pipeline links to Russia from 2008 onward.

"Russia seems to have conclusively defeated all Western-backed projects to bring oil and gas from Central Asia directly to Europe," Mr Socor wrote for US NGO Jamestown on Thursday (31 May). "EU officials seem disinclined to conduct a what-went-wrong, lessons-learned analysis of these cascading setbacks."

He added that "undertaking a critical analysis could...yet lead to reversing the strategic defeat of May 2007." But his withering analysis of EU and US diplomacy holds out scant hope of any positive turn. The situation stems from the "absence of a coherent Western energy strategy in Eurasia," the analyst said.

EU 'incoherency'

Some of the commission's own experts are also beginning to call the project into question. Senior commission energy adviser Fawzi Bansarsa at a conference in Warsaw in May said the Trans-Caspian pipeline is a "political bomb" for EU-Russia relations and should not go ahead, Mr Socor reports.

Other commission officials are annoyed by what they call a "lack of transparency" on EU-Central Asia negotiations on the part of the German EU presidency and EU regional envoy Pierre Morel, with the commission starting to compete with EU diplomats for influence in the region.

At EU member state level, there is also a lack of common approach. The UK and Sweden lead a camp that wants to use EU diplomatic sanctions against Uzbekistan to get human rights reforms. But Germany and Spain are pushing for a more pragmatic line that puts human rights in second place for now.

On top of this, a series of bilateral energy deals between Russia and EU states Germany, Italy, Hungary, Austria, Greece and Bulgaria are complicating the EU's ambition to "speak with one voice" to international partners on energy security.

Talks between Austria, Hungary and Russia on new gas storage facilities and alternative pipelines seem to directly compete with the EU's Trans-Caspian project. Germany's deal to bypass Poland via a Baltic Sea gas pipe to Russia has seen Warsaw raise a ruckus over EU solidarity.

EU-Kazakhstan relations at risk

Meanwhile, Kazakhstan - seen by the EU as its partner "primus inter pares" in Central Asia, due to its reformist government and vast energy reserves - is wobbling in terms of democratic standards and internal stability.

On 22 May, 67-year old president Nursultan Nazarbayev changed the constitution to allow himself to stay in power for life. His secret services are embroiled in a messy power struggle within his own family, trying to shut down the financial and political ambitions of the president's son-in-law, Rakhat Aliev.

Nazarbayev is pressing the EU to launch bilateral summits with Kazakhstan in recognition of its special status in the region. It is also pushing for EU approval to chair the Eurasian pro-democracy club, the Vienna-based OSCE, in 2009.

External relations commissioner Benita Ferrero-Waldner has backed the OSCE move, on condition of further democratic reforms. But her experts are saying the summit proposal is premature, as such top-level political recognition would undermine EU leverage to steer the country on a pro-EU path.

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