The south stream versus nabucco pipeline race: Geopolitical and Economic (ir)rationales and political stakes in mega-projects

International Affairs

Volumn 86, Issue 5, 2010, Pages 1075-1090

  Baev, Pavel K ^a   Øverland, Indra ^a  

^a PEACE RESEARCH INSTITUTE OSLO PRIO   (Norway)

Author keywords

[No Author keywords available]

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EID: 77957358586     PISSN: 00205850     EISSN: 14682346     Source Type: Journal    
DOI: 10.1111/j.1468-2346.2010.00929.x     Document Type: Article

References (68)

1. On President Medvedev's speech at the Nord Stream ceremony, see Anatoly Medetsky, 'Medvedev delivers Putin's brainchild', Moscow Times, 12 April 2010. Oettinger's unfortunate remark was reported in Cerstin Gammelin, 'Nabucco-Pipeline kommt später', Süddeutsche Zeitung, 25 March 2010. On the Batumi non-event, see 'Georgian energy summit runs out of gas', RFE/RL Newsline, 14 Jan. 2010, accessed 26 Aug. 2010, http://www.rferl.org/content/Georgian_Energy_Summit_Runs_Out_Of_Gas/1929462.html.
2. The history and key parameters of each project are nicely presented at their respective websites, http://www.nabucco-pipeline.com/ and http://south-stream.info/?L=1, accessed 26 Aug. 2010
3. The articles in Wikipedia are also useful, even if Nabucco, is presented in a rather more positive light than South Stream (http://en.wikipedia.org/wiki/Nabucco_pipeline,http://en.wikipedia.org/wiki/South_Stream), accessed 26 Aug. 2010.
4. Andrea Bonzanni, 'Turkey-Azerbaijan meeting keeps Nabucco alive', World Politics Review, 21 Jan. 2010; Vladimir Socor, 'Nabucco gas project retains political and business momentum', Eurasia Daily Monitor, 5 Feb. 2010.
5. One up-to-date analysis is Katinka Barysch, 'Should the Nabucco pipeline project be shelved?', CER Policy Brief, May 2010, http://www.cer.org.uk/pdf/pb_Nabucco_5may10.pdf, accessed 26 Aug. 2010.
6. On Putin's involvement with Gazprom, see Natalya Grib, Gazovyi Imperator [Gas emperor] (Moscow: EKSMO, 2009); Valery Panyushkin and Mikhail Zygar, Gazprom: novoe russkoe oruzhie [Gazprom: new Russian weapon] (Moscow: Zakharov, 2008). On the Italian connection, see Evgeny Utkin, 'Sorting out the Southern Stream', Expert, 12 April 2010.
7. See e.g. Zeyno Baran, 'Oil, oligarchs and opportunity: energy from Central Asia to Europe', testimony to the US Senate Committee on Foreign Relations, 12 June 2008, http://www.hudson.org/index.cfm?fuseaction=publication_details&id=5640, accessed 26 Aug. 2010.
8. Andris Piebalgs, 'Making Nabucco a reality', My blog, 4 Nov. 2008, accessed 1 March 2010 [This blog is no longer available as Piebalgs moved to the now position of Commissioner for Development and started a new blog neglecting to archive the old one.], http://blogs.ec.europa.eu/piebalgs/making-nabucco-a-reality/
9. Gregory Gleason, 'Georgian war and great power politics', CACI Analyst, 17 Sept. 2008, accessed 26 Aug. 2010. A more elaborate analysis is Ronald D. Asmus, A little war that shook the world (New York: Palgrave Macmillan, 2010), http://www.cacianalyst.org/?q=node/4938.
10. An example is Ariel Cohen, ed., Eurasia in balance: US and regional power shift (London: Ashgate, 2005).
11. For an upbeat perspective, see Frederick S. Starr and Svante E. Cornell, eds, The Baku-Tbilisi-Ceyhan pipeline: oil window to the West (Washington DC: Johns Hopkins University Press, 2005).
12. On Azerbaijan's choices, see l, 'Will Azerbaijani gas export to China scuttle the southern corridor?', CACI Analyst, 9 Dec., accessed 26 Aug. 2010; 2009, http://www.cacianalyst.org/?q=node/5234,Stanislav Pritchin
13. 'Baku corrects its energy vector', Nezavisimaya gazeta, 29 March 2010.
14. On the prospects for this gas diversification, see Paul Goble, 'The Azerbaijani-Russian gas accord: a milestone on more than one road', Azerbaijan in the World, 1 July, accessed 26 Aug. 2010.2009, http://ada.edu.az/biweekly/issues/vol2no13/20090719071201217.html
15. One good work is Simon Dalby and Gearoid O Tuathail, eds, Rethinking geopolitics (London: Routledge1998).
16. Strobe Talbott, 'Dangerous Leviathans: Russia's bad philosophy', Foreign Policy, accessed 26 Aug. http://www.foreignpolicy.com/story/cms.php?story_id=4827,2010.
17. Thus the 2009 World Energy Outlook (Paris: IEA, 2009) predicted in its reference scenario that world primary energy demand would grow by 1.5% a year in 2007-30, and that demand for natural gas in Europe would increase from 541 bcm in 2007 to 590 bcm in 2020 and 651 bcm in 2030 (p. 478).
18. In August 2009 Prime Minister Vladimir Putin signed a special order on Russia's non-participation in the Energy Charter Treaty and Protocol: see Ali Aliev, 'Charterless', Expert, 7 Aug. 2009.
19. Commentators discovered with some surprise that Medvedev suggested expanding regulation to cover the supply of and demand for brushwood: see Dmitri Butrin, 'Rules of the game', Kommersant, 27 April2009.
20. One sharp commentary is offered by Mikhail Korchemkin, 'Europe increases gas import from Gazprom's competitors', Vedomosti, 13 April 2010.
21. Gazprom's best year was 2006 with 556 bcm; the drop to 461.5 bcm in 2009 made it the worst year ever. See Elena Mazneva, 'Four years to the record', Vedomosti, 15 April 2010.
22. On Gazprom's uncertain prospects, see Catherine Belton and Isabel Gorst, 'Energy: progress frozen', Financial Times, 25 March 2010.
23. The assessment of oversupply was produced at the meeting of the Gas Exporting Countries Forum in April 2010: see Natalya Grib, 'Gas would profit from oil', Kommersant, 20 April 2010.
24. On Gazprom's flexibility, see Sergei Sumlenny, 'Compromise on the sacred article', Expert, 1 March 2010.
25. As quoted in Natalya Grib, 'Turning the gas valves', Business Guide in Kommersant, 14 May 2009.
26. Medvedev took this stance at the meeting of the Russian Security Council on 17 March 2010.
27. An official translation of his remarks is at, accessed 26 Aug.http://eng.kremlin.ru/speeches/2010/03/17/1931_type82913_224806.shtml, 2010.
28. Valuable current information can be found at the EU web portal 'Energy policy for a competitive Europe', accessed 26 Aug. http://ec.europa.eu/energy/index_en.htm,2010.
29. One recent example is the decision of the European Commission to impose heavy fines on German and French 'majors' for forming a cartel: see 'Antitrust: Commission fines E.ON and GDF Suez €553 million each for market-sharing in French and German gas markets', Brussels, IP/09/1099, 8 July, accessed 26 Aug. 2010.2009, http://eng.kremlim.ru/news/140
30. Gazprom's requests for exemptions were mostly rejected in mid-2010: see 'Gazprom and other Russian companies will accept our demands', interview with Günter Oettinger, Kommersant, 30 July 2010.
31. In the course of consensus-building, the 'package' was much diluted, so its real impact will be moderate: see Natalya Grib and Mikhail Zygar, 'Package of problems for Gazprom', Kommersant, 23 April 2009.
32. For a concise analysis of the limits of Qatar's gas growth, see 'Turning up the gas', The Economist, 16 July, See also World Energy Outlook 2009 2009. p. 490.
33. Russian evaluations fluctuate from firm dismissal to panic: see Ekaterina Grishkovets, 'Powerful gas bubble is discovered in Poland', Kommersant, 6 April 2010.
34. The transcript is available at http://www.jamestown.org/media/events/, accessed 26 Aug.2010.
35. Vlad Socor, 'Czech Republic offsetting Russian oil supply cuts from alternative sources', Eurasia Daily Monitor, 29 July 2008.
36. Germany's RW E certainly stands out in this 'team', so Gazprom made it an offer to join the South Stream project. This was hardly a smart tactical move: see Natalya Grib and Elizaveta Kuznetsova, 'Gazprom takes over Nabucco from inside', Kommersant, 14 July 2010.
37. See Vlad Socor, 'Chancellor Merkel says nein to Nabucco', Eurasia Daily Monitor, 9 March 2009.
38. For a Turkish perspective, see Mete Goknel, 'Nabucco-South Stream: whose side is luck on?', Eurasia Critic, June 2010, pp. 50-56.
39. Pierre Noël, 'Beyond dependence: how to deal with Russian gas', Policy Brief 9, European Council on Foreign Relations, Brussels, Nov. 2008.
40. Aleksandr Medvedev, Gazprom's deputy CEO, argued that the EU plan was based on 'political phobias related to greater dependence on Russian gas supplies' and as such was 'to put it mildly, devoid of sense'; the text of his speech at the 'Russian Gas - 2008' forum is available at, accessed 26 Aug. http://www.europeanenergyreview.eu/index.php?id=392,2010.
41. Mikhail Zygar, 'The war of streams', Kommersant-Vlast, 18 May 2009.
42. Natalya Grib and Aleksandr Gabuev, 'Gazprom blocks the hostile merger', Kommersant, 16 March 2010.
43. Dmitri Badovsky, 'Transfer of power: Hamlet question for the tandem', Vedomosti, 20 April2010.
44. Sergei Shelin, 'Thick dreams', Gazeta.ru, 14 April, accessed 26 Aug. 2010 2010, http://gazeta.ru/comments/2010/04/14_a_3351188.shtml
45. On the launch of that initiative, see Aleksandr Privalov, 'On national projects', Expert, 6 March2006;
46. on Medvedev's ambition to keep them on track despite the crisis, see Irina Granik, 'I am fed up with these reports', Kommersant, 30 July 2010.
47. It was Kazakhstan's President Nursultan Nazarbaev who had the idea for the Eurasia Canal: see John C. K. Daly, 'Rival Caspian canal projects compete for investors', Eurasia Daily Monitor, 25 June2007.
48. On the cancellation of this high-profile private development project, see Andrew Osborn, 'Moscow dreams can't get off the ground', Wall Street Journal, 17 Aug. 2009.
49. Vladislav Inozemtsev, 'Modernizatsya.ru: hopeless projects', Vedomosti, 10 Aug.2009.
50. After that setback, the navy command decided to postpone the construction of the fourth Borey-class submarine: see Albert Dubrovin and Sergei Makeev, 'Bulava might take off but it won't fly', Nezavisimoe voennoe obozrenie, 11 Dec. 2009.
51. Visiting India in March 2010, Putin sought to engage both the Indian high-tech sector and the military in cooperation aimed at making GLONASS operational: see Andrei Kolesnikov, 'Nothing eternal - only business', Kommersant, 13 March 2010.
52. Vladimir Milov, 'Heritage of irresponsible industrialization', Gazeta.ru, 24 Aug., accessed 26 Aug. 2010. 2009, http://gazeta.ru/column/milov/3239687.shtml
53. Aleksandr Kukolevsky, 'Silence of the turbines', Kommersant-Vlast, 24 Aug. 2009;
54. on Putin's order to speed up these projects, see Igor Naumov, 'Siberia will get more electricity', Nezavisimaya gazeta, 3 Aug.2010.
55. See Paul Krugman, 'The making of a Euromess', New York Times, 14 Feb. 2010.
56. One concise evaluation is 'Playing the parliamentary game', The Economist, 16 July 2009.
57. See Tony Barber, 'Could the EU find unity in crisis?', Financial Times, 7 Oct. 2008.
58. The article 'Eurofighter Typhoon' in Wikipedia is informative:, accessed 26 Aug. http://en.wikipedia.org/wiki/Eurofighter_Typhoon#Political,2010.
59. David Shiga, 'Large Hadron Collider to restart at half its designed energy', New Scientist, 7 Aug., accessed 26 Aug. 2010. 2009, http://www.newscientist.com/article/dn17566-large-hadron-collider-to-restart-at-half-its-designed-energy.html
60. The three-year-old assessment still rings true: see 'Struggling Galileo', ViewsWire, Economist Intelligence Unit, 22 May2007.
61. US Special Envoy for Eurasian Energy Richard Morningstar and US Senator Richard Lugar expressed confidence that the two pipelines might coexist perfectly well at the joint press conference in Ankara in July, accessed 26 Aug. 2010. 2009: http://turkey.usembassy.gov/statement_b_071309.html
62. Albert W. Tucker invented the context of choices faced by two criminals arrested on flimsy evidence: see William Poundstone, Prisoner's dilemma (New York: Doubleday, 1992).
63. Vladimir Chizhov, Russia's ambassador to the EU, did not get far with such suggestions: see Andrei Terekhov, 'South Stream should be a priority project for the EU', Nezavisimaya gazeta, 18 May 2009.
64. Visiting Kiev in summer 2010, Oettinger confirmed that Ukrainian pipelines were the best way to deliver Russian gas and expressed doubt about the need for the South Stream: see Tatyana Ivzhenko, 'Kiev needs an ally in negotiations with Moscow', Nezavisimaya gazeta, 30 July2010.
65. In August 2009 Moody's agency cut Naftogaz's credit rating from Caa1 to Caa2, citing high risk of default: see Reuters, 7 Aug., accessed 26 Aug. 2010.2009, http://uk.reuters.com/article/idUKWLA082520090807
66. Andrei Nikolsky and Elena Mazneva, 'Keep the base', Vedomosti, 22 April 2010.
67. Andrew E. Kramer, 'Seeking lower fuel costs, Ukraine may sell pipelines', New York Times, 24 March 2010.
68. Gevorg Mirzayan, 'There is no money', Expert, 26 June 2009.