Russia tightens grip on EU energy supply
· Putin signs deal for oil pipeline to Greece
· Concerns increased over dependency on Moscow
Luke Harding in Moscow
Friday March 16, 2007
The Guardian
Russia yesterday consolidated its grip as the EU's main energy supplier by agreeing a deal to build a major oil pipeline across Bulgaria and Greece.
The 175-mile, $1.2bn (£619m) pipeline will link Bulgaria's Black Sea port of Burgas with the Greek port of Alexandroupoli. The project will make it possible for the first time for Russian and Caspian oil to be transported directly to the EU, avoiding Turkey.
Speaking in Athens, where he flew to sign the deal with his Bulgarian and Greek counterparts, Russia's president Vladimir Putin yesterday said the long-delayed agreement would benefit all three countries. "We consider that reliable access to energy supplies is one of the conditions of our civilisation," Mr Putin said. He added: "This pipeline demonstrates how all countries can benefit, not just in the Balkans but in Europe."
The pipeline, however, comes at a time when EU leaders have become increasingly anxious about their dependence on Russian oil and gas. Russia already provides Europe with a third of its oil and 40% of its natural gas.
The latest deal is likely to deepen the EU's dependence on Russian energy at a time when Moscow's reliability as an energy supplier is in doubt. EU leaders have been left fuming by Moscow's decision to turn off Europe's gas supplies during disputes with Ukraine last year and Belarus two months ago.
Yesterday, however, Greek prime minister Costas Karamanlis said the pipeline "puts Greece and Bulgaria on the world energy map. It will also help international markets with improved access at a time when energy is a fundamental concern."
Russian oil tankers have to squeeze through Turkey's congested Bosporus strait but oil from Russia, as well as from Kazakhstan and other Central Asian republics, will be able to be loaded on tankers at Russia's Black Sea coast and piped via Bulgaria to the deepwater port of Alexandroupoli.
From there it can go anywhere, experts say. "It should release pressure on the Bosporus strait," said Ronald Smith, chief analyst with Moscow's Alfa Bank. "Currently you have a ship going through every minute."
The new deal comes a year after a rival pipeline was completed between Azerbaijan and Turkey, widely seen as a US-backed attempt to reduce Russia's monopoly as the region's chief energy supplier.
Russian state-owned firms will control 51% of the venture, including infrastructure such as pumping stations, storage facilities and loading docks. EU members Bulgaria and Greece will have 24.5% each. On Monday Matthew Bryza, US deputy assistant secretary of state for European and Eurasian affairs, visited Athens and expressed support for the pipeline, which is likely to take 700,000 barrels of oil a day to Greece. He admitted, however: "Where we are focusing most urgently now is diversification of gas supply ... away from its one primary supplier, Gazprom."
Russia tightens grip on EU energy supply
Author