Laid_Back_Farmer's Blog

...."Everything seemed to work in Moscow's favor when on June 23 a memorandum was signed in Rome between Gazprom and Italy's ENI on a 900-kilometer pipeline project across the Black Sea from Russia to Bulgaria with an annual capacity of about 30bcm. The undersea pipeline, on reaching Bulgaria, would have two options for the Bulgaria-Italy route. A southwestern option would be through Greece and the Adriatic seabed in the Otranto Strait to southern Italy, while a northwestern route would run from Bulgaria via Romania, Hungary and Slovenia (and possibly Austria) to northern Italy. Bulgaria and Greece promptly announced their intention to join the project, known as the South Stream project. The Wall Street Journal aptly described it as a "pipeline into the heart of Europe".

The upstream source for the South Stream project would be largely Central Asian and Siberian gas. Russia's game plan was obvious: maximize its control of the export routes for Central Asian gas. Russia signaled that it was outstripping the US both in regard of the upstream race for Central Asian gas as well as in the race for control of transit and downstream activity.

Alarm bells began ringing in Washington. On May 30, Vice President Dick Cheney's deputy assistant for national security affairs, Joseph Wood, rushed to Baku, Azerbaijan. He had a single message: Washington intended to meet the Russian challenge head-on and would persist with the policy of opening direct access to Central Asian oil and gas through Azerbaijan and Georgia, bypassing Russian territory and Russian pipelines. He stressed the US would push ahead with the Nabucco and Turkey-Greece-Italy gas transport projects. He told the Azerbaijani leadership that it should take the initiative to sort out Azerbaijan's bilateral disputes with Turkmenistan so that the latter could be drawn into the proposed gas projects.

Simultaneously, on June 1, Steven Mann, US principal deputy assistant secretary of state, held talks with Berdimukhamedov in Ashgabat. Mann strongly pitched for the trans-Caspian gas pipeline project (Turkmenistan to Azerbaijan to Georgia to Turkey to Europe). He conveyed Washington's keen interest that Turkmenistan should sell its gas to the European market directly, without the Russian intermediary.

Other senior US officials began fanning out to the Caspian region carrying similar messages that it would be far more advantageous for the Central Asian gas- and oil-producing countries to deal with European buyers directly. Thus US assistant secretary of state Richard Boucher visited Kazakhstan and Deputy Assistant Secretary of State Matthew Bryza visited Azerbaijan in the first week of June. Washington also began pressuring the European Union to display a sense of urgency in forestalling the looming Russian monopoly over Central Asia's gas exports.

Washington's primary intent was to sow seeds of doubt in the Turkmen mind regarding the wisdom of putting all its eggs in the Russian basket. On June 21, Washington upped the ante when Admiral William Fallon, commander of the US Central Command, arrived in Ashgabat and was received by Berdimukhamedov. Fallon carried a brief on energy cooperation. The consultation was evidently productive. On June 27, when Evan Feigenbaum, US deputy assistant secretary of state for South and Central Asian affairs, arrived in Ashgabat with a delegation of American oil majors, he heard good news. "The president [Berdimukhamedov] stated publicly, very clearly, that Turkmenistan remains interested in the trans-Caspian pipeline," Feigenbaum later told the media. "

continued at:

http://www.atimes.com/atimes/Central_Asia/II29Ag01.
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