Russia: Gazprom Will Route All EU Gas Through Turkey

Russian energy major Gazprom announced that the company will begin to shift the flow of natural gas supplies destined for the European Union. Gazprom chief Alexei Miller stated that the company will begin to channel resources through Turkey, and from that point into European markets. The move appears to be geopolitically motivated, as it will obligate the European Union to build the necessary connecting infrastructure near the borders of Turkey and Greece, or lose Russian gas supplies altogether. The move has predictably drawn the ire of the European Union’s energy minister, who has lambasted the move as nonsensical and damaging to Russia’s reputation as an energy supplier.

In the immediate term, the move will not redound to the benefit of either side. The European Union has begun to develop interconnectors that will permit European states to supply each other with gas even if Russia cuts supplies to one or more European states. Russia’s ability to rapidly reroute its natural gas supplies is questionable, as is Turkey’s to work expeditiously to expand the partnership. The Russian government has announced that its deal with Turkey will afford Ankara a discounted rate of 6% below the market rate.

The move to reroute supplies to Turkey comes on the heels of the Kremlin’s announcement that the planned South Stream project would not come to fruition due to a lack of funding. Russia has actively sought out new or expanded partnerships with China, inking a historic 30 year deal with China’s CNPC months ago, and has also invited India to participate in Arctic oil exploration. The European Union has not yet articulated a full response to the Russian maneuver.

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News Briefs:

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  • Harsh winter conditions in Tajikistan have led to energy rationing and increased usage of coal throughout the country. Despite the fact that Tajikistan controls vast amounts of Central Asian water, the country’s dependence on hydroelectric power also makes it vulnerable to tough weather conditions. When rivers slow and freeze, water levels at local dams drop, creating shortages and subsequent blackouts throughout the country.
  • Georgia and Turkmenistan have committed to stronger bilateral relations. The Georgian Minister of Foreign Affairs, Tamar Beruchasvili welcomed the ambassador from Turkmenistan recently to discuss renewed collaboration in trade and a number of commodity sectors, including energy. The two sides’ talks are ongoing.
  • Azerbaijan’s state-controlled energy giant SOCAR completed the construction and subsequent installation of a gas-lift compressor station. The station’s construction began in 2009 and is designed to facilitate the operation of wells operating in the Caspian Sea that rely on gas-lift technology to facilitate the extraction of natural gas from wells. The new station will serve to regulate all such stations.
  • Kyrgyzstan announced new measures implemented to curb the flow of funds destined for terrorist organizations. The Kyrgyz State Financial Intelligence Service has begun to work with a network of “middlemen” to better decipher what sources are being used to transfer funds to extremist groups acting both in Kyrgyzstan and throughout Central Asia. The task has been complicated, however, by the sheer volume of remittances already entering Kyrgyzstan from abroad. The country relies heavily on remittances sent by workers in Russia and elsewhere.
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