RUSSIA-UKRAINE = 1-0

Entrerà in funzione oggi, martedì 8 novembre, North Stream, la pipeline che porterà il gas russo in Germania attraverso il Baltico. Dmitrij Medvedev e Angela Merkel hanno “accolto” quel gas in Germania, a Lubmin, girando il rubinetto che gli ha aperto la rete europea. Alla cerimonia hanno preso parte anche il primo ministro francese, François Fillon, il collega olandese Mark Rutte e il commissario europeo all’Energia, Gunther Oettinger: Francia e Olanda sono gli altri due Paesi che aderiscono al consorzio, diviso tra Gazprom, le tedesche Wintershall e E.On Ruhrgas, l’olandese Gasunie e la francese Gdf Suez.

“I consumatori europei potranno avere fino a 55 miliardi di metri cubi di gas dalla Russia nei prossimi anni con il lancio della seconda condotta del North Stream – ha affermato Medvedev in una conferenza stampa congiunta con la Merkel a Berlino – il gas naturale russo e l’elettricità prodotta con essa garantiranno una fornitura energetica stabile ai consumatori del continente e aumenteranno la loro sicurezza energetica”. Il primo tratto pomperà 27,5 miliardi di metri di cubi di gas all’anno, circa la metà di quella che sarà la capacità definitiva della struttura. North Stream parte da Vyborg, nei pressi di San Pietroburgo, e termina a Lubmin, in Germania.

North Stream è lungo 1.224 chilometri e ha ora una capacità di trasporto di 27,5 miliardi di metri cubi all’anno, che diventeranno 55 con la costruzione di una seconda linea, attesa per l’autunno 2012. Il monopolio russo Gazprom ha già siglato contratti di fornitura a lungo termine con diversi Paesi europei, inclusa la Germania, la Danimarca, il Belgio, l’Olanda, la Francia e la Gran Bretagna. In attesa che South Stream colleghi invece la Russia all’Europa meridionale, sempre con l’obiettivo di ridurre i volumi del gas russo – finora l’80% – esportato in Europa attraverso l’Ucraina.
(East Journal)

TYMOSHENKO, THE BIG BLUFF. (Tymoshenko, il grande bluff)

Far fuori gli avversari politici mettendoli dietro le sbarre non è certo il metodo migliore per gestire il potere ottenuto in maniera democratica. Eppure è quello che sta succedendo in Ucraina con il caso di Yulia Tymoshenko, ex primo ministro e leader dell’opposizione che è stata condannata a sette anni di galera per abuso di potere.

Al presidente Victor Yanukovich la dura sentenza serve anche per ottenere una piattaforma giuridica per tentare di ottenere la revisione dei contratti del 2009, obiettivamente svantaggiosi per il paese. Si spiega in questa maniera la reazione russa, con il Cremlino che sia durante il procedimento sia alla sua conclusione si è schierato a favore dell’imputata, sottolineando la validità degli accordi raggiunti tra l’eroina della rivoluzione arancione e Vladimir Putin due anni fa.
I rapporti tra Kiev e Mosca sono sempre passati attraverso le pipelines: è l’oro blu a unire o dividere, a seconda dei momenti. E i protagonisti di queste storie sono sempre gli stessi. In Ucraina Yulia Tymoshenko, ex principessa del gas che con il suo gruppo ha gestito per anni il traffico con la Russia e che prima è passata al ministero dell’Energia poi alla seggiola di premier; Dmitri Firtash, oligarca impegnato nell’energia e non solo, nemico giurato della bionda pasionaria; Yuri Boiko, attuale ministro dell’Energia, ex ceo a Naftogaz e uno dei suggeritori di Yanukovich, da anni schierato con l’ala conservatrice uscita dal blocco dell’ex presidente Leonid Kuchma cui appartengono gli altri magnati dell’industria ucraina, guidati da Rinat Akhmetov.

In Russia chi controlla Gazprom, cioè il Cremlino, è il vero gestore delle relazioni che toccano economia e politica: Putin impera. E se l’ormai scomparso Victor Chernomyrdin dopo essere stato per anni il numero uno di Gazprom era stato mandato a fare l’ambasciatore in Ucraina lo scorso decennio il motivo era chiaro. Politica e gas: gli intrecci al Cremlino sono come quelli alla Bankova e interpretarli non è sempre cosa semplice: ma è chiaro che il processo Tymoshenko si inserisce nel canovaccio dei duelli per il potere.
L’Europa in questa contesa fa da spettatrice: non ha danari per intraprendere un progetto consistente per la ristrutturazione del gas ucraino e rischia di lasciare via libera alla Russia che, avviato Nordstream, ha ora Southstream in progetto. Il sistema di trasporto ucraino va modernizzato e Gazprom vuole metterci sopra le mani, sul modello bielorusso (lo stesso dicasi per Naftogaz). Bruxelles si allarma per la Tymoshenko, ma non può permettersi di abbandonare i negoziati sull’accordo di associazione che dovrebbe essere firmato entro l’anno con Kiev.
L’errore europeo è stato quello di non capire che la rivoluzione del 2004 era un bluff. Gli ucraini l’anno capito da tempo, basta andare a guardarsi i sondaggi sul gradimento della Lady di ferro, peggiori di quelli di Yanukovich. Ora rischia di essere troppo tardi.
(Limes)

TOO MANY PIPELINES. (Troppe pipeline)

Europe may not be able to sustain all its proposed gas supply pipelines but will need to build at least some soon to ensure security of supply in the latter half of this decade.

Scarred by the Russia-Ukraine gas row of 2009, which cut about a fifth of Europe's supply in mid winter, major European gas consumers plan many pipelines to promising producing regions in central Asia, North Africa and the Middle East.

With China competing to woo producers, Europe will likely struggle to secure enough gas to fill all the new connections and would be unable to use it all if they do get filled.

"If every project that is discussed is built then there will be way too much supply, so I think the best projects will be developed and marginal ones delayed, or not built," said Graham Freedman, a senior analyst at UK consultancy Wood Mackenzie.

"But I don't think anybody doubts the fact that Europe is going to need more gas because domestic production is falling. It is going to be an importer for many years to come," he said.

Wood Mackenzie forecasts that gas demand in the European Union, Turkey and former Yugoslav states could rise from 551 bcm in 2010 to 653 billion cubic metres in 2020.

Under what it says is a bullish demand scenario, this would leave a supply shortfall of 125 bcm by the end of the decade unless far more is produced at home or brought in from overseas.

But if all major new pipelines were built and filled to capacity, gas flows to Europe by 2020 could far outstrip demand.

Since the Russia crisis, Europe has been comfortably supplied with gas for power generation, heating and industry through existing pipelines and an increasing number of liquefied natural gas (LNG) tankers. The Medgaz link from Algeria to Spain could further increase supplies into the Iberian Peninisula by 8 bcm/year, if the repeatedly delayed pipeline opens this winter.

The 55 bcm/year Nord Stream pipeline under the Baltic Sea is expected to bring more Russian gas to western Europe, bypassing Ukraine by the end of next year.

Russia is pushing on with its South Stream project to bring up to another 63 bcm under the Black Sea via the Balkans.

The European Union is also championing the 31 bcm alternative Nabucco plan that would bring Caspian and Middle East gas via Turkey, excluding Russia.

But Italy also hopes that its projects TAP and ITGI for around 10 bcm capacity each can compete for mainly Caspian gas market share with South Stream and Nabucco, giving it more options via the "Southern Corridor" to Europe.

In all, the maximum capacity of these pipelines, some of which were conceived prior to the economic crisis which brought a gas price slump, adds up to 177 bcm to Europe's supply.

Pipeline supplies would also face competition from liquefied natural gas (LNG), which has become much more readily available because of a surge in North American shale gas production, with unconventional gas finds in Europe posing another threat to both types of external supplier.

"Some projects make sense from a security of supply perspective, because of the diversification of gas sources that they would bring," said Nigel Harris of UK consultancy Kingston Energy. "But with plenty of gas available from existing sources, there's no commercial benefit from diversification."

Nord Stream and South Stream are just additional routes for Russian-controlled gas flows, he said, while alternative sources from Azerbaijan, Turkmenistan and Iran remain uncertain.

The International Energy Agency (IEA) thinks global gas demand may recover from 2011, but it still expects supply to outstrip demand until 2020..

Some gas suppliers are more optimistic, pointing to buoyant demand in the Middle East, China and India which could leave less gas for Europe. Phillipe Boisseau, president of France's Total Gas & Power, told the recent European Autumn Gas Conference in Berlin that the "supply bubble will disappear in three years."

Speakers agreed that current gas prices in consuming countries would not support all Europe's proposed supply lines, although they expect demand for power generation to contine to rise as Europe looks to back up its increasing wind power capacity with gas-fired plants.
(FuturesPros.com via Reuters)

ALL AT THE ZAR COURT. (Tutti alla corte dello zar)

Alcune compagnie energetiche tedesche hanno espresso il desiderio di partecipare al progetto South Stream. E’ quanto emerge dall’incontro Berlusconi-Putin di domenica scorsa. Ecco che le ali del Nabucco sono sempre meno dorate e, se le cose continueranno per questa china, il progetto energetico europeo non andrà lontano. Nabucco è infatti il nome dato al gasdotto che dal mar Caspio dovrebbe rifornire i Balcani fino all’Italia e all’Austria. Lo scopo della sua costruzione è eminentemente geopolitico: estendere l’influenza “occidentale” sui Balcani e sul Caucaso. La sua progettazione è precedente all’adesione all’Unione Europea dei Balcani orientali e si profila quale strumento di persuasione a restare in orbita europea per i Paesi che vedono procedere a rilento il loro percorso di integrazione. Nabucco nasce come concorrente del South Stream russo poiché, si ragionò giustamente, dipendere dalla Russia nel settore dei rifornimenti energetici significherebbe perdere larghe fette di sovranità: come criticare la diplomazia di Mosca nel campo dei diritti umani se dal Cremlino controllano i rubinetti del gas? Come osteggiare la politica estera di Mosca, le guerre in Cecenia e in Georgia, l’assalto all’Artico, le ingerenze in Ucraina, se si diventa servi del gas russo? E ancora: come affermare l’autonomia dell’Unione di fronte a un duplice vassallaggio, militare-americano da un lato e russo-energetico dall’altro?

Ma sul Nabucco si è investito poco e male. L’Italia e l’Eni sono state le prime a capire che non c’era di che ingrassarsi col progetto europeo e si son subito vendute al “rivale” russo. Eni e Gazprom diventano così partners per la costruzione del South Stream con tanti saluti all’europeo Nabucco. L’Italia, che con difficoltà si annovera tra le democrazie compiute, predilige fare affari con Putin e Gheddafi. La torta russa piace non solo agli italiani, ecco che la Edf (Electricité de France) entra nella joint-venture con Gazprom ed Eni. Lo scorso giugno 2010 Nicolas Sarkozy vola a San Pietroburgo alla corte dello zar per sottoscrivere l’affare.

Ora anche i tedeschi vogliono partecipare all’abbuffata. “Benone” esclama Berlusconi in visita presso l’amico Putin, in questo modo sarà possibile riscuotere l’interesse dell’Unione Europea finora rimasta fredda nei confronti del South Stream. I tedeschi, va detto, già sono partner di Gazprom per la costruzione del gasdotto North Stream, quello che aggira repubbliche baltiche e Polonia (ree di scarso amore verso lo zar) e va dritto in Germania; quello sottoscritto a inizio anni Duemila dall’allora cancelliere Schroeder, attratto dall’oro azzurro russo, poi divenuto dirigente Gazprom e responsabile proprio del consorzio North Stream; quello per cui in Polonia si stracciano le vesti gridando a un nuovo patto Molotov-Ribbentrop.

Rumors indicano nella Basf il nome dell’azienda energetica tedesca pronta a unirsi ai tre moschettieri Gazprom, Eni, Edf. Un’ulteriore mazzata al progetto Nabucco per il quale la Banca europea per gli Investimenti (Bei) e quella per la Ricostruzione e Sviluppo (Bers) hanno appena stanziato altri 4 miliardi di euro, segno che l’affrancamento energetico dell’Europa dalla Russia è considerato prioritario da Bruxelles che si trova a dover gestire tre serpi in seno assai velenose.

Una nota finale: il Nabucco parte dall’Iran, via Tabriz ed Erzurum. Proprio ad Erzurum raccoglie il braccio che s’avvia da Baku e passa per Tiblisi. Poi va verso Ankara, Istanbul e l’Europa. Il governo italiano si è sempre mostrato molto duro nei confronti del regime degli Ayatollah, ai limiti dell’ottusità, e si è detto favorevole all’intervento militare a stelle e strisce mentre, per ragioni che dopo questo lungo discorso parranno ovvie, non ha mai detto “beh” sul massacro in Cecenia.

I partners del Nabucco, inoltre, stanno tutti cambiando casacca: L’Azerbaijan si è vincolato con Mosca, e ben poco della sua produzione resterà a Bruxelles, ma il Cremlino ha promesso protezione e denari in quantità al regime di Baku. Il Turkmenistan, altra dittatura, è da pochissimo entrata in affari con Eni e Gazprom e punta a rifornire la Cina più che l’Europa. L’Iran -grazie anche all’intervento americano- è assai indietro nello sviluppo dei suoi giacimenti. Ecco allora che non resta che prendersi in faccia l’ironia di Putin: “Che Dio li aiuti -ha dichiarato- il Nabucco è un tubo vuoto e il consorzio che lo sta sviluppando (l’austriaca Omw, l’ungherese Mol, la rumena Transgaz, la Bulgargas, la tedesca Rwe e la turca Botas. ndr) non fornirà nemmeno un metro cubo di gas fino al 2018 mentre fra un anno il South Stream sarà pronto”. Con buona pace della democrazia europea.
(East Journal)

NORD STREAM TIME. (L'ora del Nord Stream)

Construction of the controversial Nord Stream pipeline from Russia to western Europe under the Baltic Sea has been officially launched.

Gazprom holds 51% of Nord Stream, which will run from the Russian port of Vyborg to Germany's Greifswald.

Russian President Dmitry Medvedev and German Chancellor Angela Merkel attended the ceremony near Vyborg.

The project was given the go-ahead only in February amid fears that the pipeline could damage the Baltic Sea.

President Medvedev said at the ceremony that the pipeline "for the first time - which may be one of its main achievements - will ensure direct supplies of Russian gas to western Europe, bypassing transit territories".

The existing pipelines run from Russia to EU countries via Ukraine, Belarus and Moldova.

Russia provides up to 30% of the gas consumed in Europe, and many European countries have been keen to secure alternative energy supplies.

Critics have argued that European countries do not need more gas from Russia and that the project is too expensive.

But Gazprom deputy chief executive Alexander Medvedev said there was plenty of demand for the gas.

"All the gas volumes have either been contracted, or have been formalized in binding obligations," he told journalists.

Gas supplies from Russia to Europe have been threatened or disrupted in the past due to political and financial disputes between Moscow and its neighbours.

But Russian President Dmitry Medvedev said at the ceremony: "This country [Russia] has been cooperating with European neighbours in the gas sector for over 40 years.

"This cooperation has stood the test of time to the full extent."

The ceremony was also attended by Nord Stream board chairman and former German Chancellor Gerhard Schroeder, Dutch Prime Minister Jan Peter Balkenende and European Commissioner for Energy
Russian gas monopoly Gazprom said on Wednesday that the first pipe had been laid under the sea.

The pipeline will be passing through Russian, Finnish, Swedish and German waters.

Last month, Nord Stream secured a 3.9bn-euro ($5.4bn; £3.5bn) fund to complete the first phase of the pipeline.

"Debt financing will cover 70% of the project costs while the remaining 30% will be provided by the project shareholders," said Paul Corcoran, financial director of Nord Stream AG.

German companies BASF-Wintershall and E.On Ruhrgas each own 20% of Nord Stream, while Gasunie of the Netherlands holds 9%.

Alexey Bulgakov from Troika Dialog investment bank pointed out that "Gazprom and its partners seem to have managed to raise funds at rather low interest rates."

The overall cost of the project, due for completion in 2012, is expected to reach 7.4bn euros.

Russia hopes to pump up to 55bn cubic metres of gas a year to EU countries through the pipeline.
Supporters of the project say that it will secure gas supplies from Russia to Europe.
But environmentalists argue that building the pipeline could lead to toxins lying on the sea bed being stirred up, as the Baltic sea is one of the most polluted in the world.

Finland had refused to give the green light to construct the pipeline, but finally agreed to it in February under the condition that ships laying the pipeline do not lay anchor in Finland's economic zone.

The final hurdle was overcome after Russian Prime Minister Vladimir Putin assured Baltic leaders that the project was safe, as extensive research had been carried out into any environmental impact of the pipeline construction.

Apart from the Nord Stream, Russia has been planning another pipeline, the South Stream, which will run from southern Russia to Bulgaria under the Black Sea.

Meanwhile, Turkey, Romania, Bulgaria, Hungary and Austria last July signed an agreement to construct the long-planned 3,300km Nabucco natural gas pipeline.

It is expected to pump up to 31bn cubic metres of gas annually from the Caspian and the Middle East across Turkey and into Europe.
(BBC)

WELCOME TO SHTOKMAN. (Benvenuti a Shtokman)

Background information

The Shtokman gas and condensate field - one of the biggest offshore fields of its kind - was discovered in 1988. The field is located in the central part of the Russian sector of the Barents Sea shelf, about 600 km northeast of the city of Murmansk at sea depths varying from 320 to 340 m.

The field’s C1+C2 reserves account for 3.8 tcm of gas and circa 37 mln t of gas condensate.

The Sevmorneftegaz - a 100 percent Gazprom subsidiary - holds the license to the project. The operator company is the Shtokman Development Company, a Swiss-registered joint venture of Gazprom (51%), Total (25%) and StatoilHydro (24%).

The Shtokman gas will be shipped partly by pipeline, partly as LNG.

According to plans, the field is to be in production from year 2013.

The village of Teriberka located northeast of Murmansk City has been chosen as the main hub for Shtokman operations.

(Barents Observer)


Shtokman postponed 3 years

The Shtokman Development AG's board of directors today decided to postpone the development of the huge field in the Barents Sea with three years.

A press release from the company confirms that a final investment decision in the project's pipeline part will be taken in March 2011, while the decision on the LNG part will be taken before the end of 2011, newspaper Vedomosti reports.

About 50 percent of the 3,8 trillion cubic meter of Shtokman gas is planned developed as LNG, the remaining shipped through pipelines. The Shtokman field, located offshore about 600 km north of Murmansk, has long been a top priority project of Gazprom. It is to be developed by the Shtokman Development AG, a company controled by Gazprom (51%) in partnership with Total (25%) and Statoil (24%).

Both the Shtokman Development AG and Gazprom has long stressed that the project will be in operation from year 2013 (the pipeline part) and 2014 (the LNG part).

As BarentsObserver has reported, several experts have recently claimed that the huge Arctic project will face serious delays, and that it might even never be developed. Among them is Oddgeir Danielsen from the Norwegian Barents Secretariat. Now, the project will not be in production before 2016, at earliest.
(Barents Observer)


Disputed waters on the agenda

Just few weeks before Russian President Dmitry Medvedev arrives in Oslo for a state visit, both Norwegian Prime Minister Jens Stoltenberg and Russia’s Vladimir Putin highlight the positive dynamics in talks over the disputed waters in the Barents Sea.

In their meeting in Helsinki yesterday, Stoltenberg and Putin confirmed the “good and productive atmosphere” in the talks over the delimitation of the Barents Sea. Both men agreed that a deal would significantly facilitate new joint projects in the two countries’ High North.

-I believe that if we manage to solve this issue, new fields of opportunities for extended economic cooperation will open, among them in the energy sector, Stoltenberg said in a press conference following the meeting, the Russian Government press service informs.

The meeting, which was held during the Baltic Sea Action Summit, lasted for about 45 minutes, and both the Shtokman field and the disputed zone were on the agenda. Both issues are highly inter-related. The huge Shtokman field is located not far from the disputed 155,000 square km zone, and is by the Norwegian side seen as a strategically key project.

In addition, the zone is believed to hide significant hydrocarbon resources. A deal on the zone delimitation and subsequent oil and gas developments in the area would have major possible impact on the Shtokman field development.

In a time with uncertainties in the world gas market, the opening of the disputed waters for oil and gas activities, would make the development of the Shtokman field more attractive. The Shtokman developers Gazprom, Total and Statoil would then not only be able to use field infrastructure in additional projects, but also have a significant chance to succeed in bids for other fields in the area.

Talking to newspaper Aftenposten after the meeting in Helsinki, Prime Minister Stoltenberg underlined that hydrocarbon developments in the Disputed Zone are impossible as long as there is no delimitation deal. He also highlighted that the oil and gas resources in the zone are located far closer to land than the Shtokman field and that they would therefore also be far easier to develop.

Talks between Norway and Russian on the delimitation of the 155,000 square kilometer zone in the Barents Sea have been going on for almost 40 years. While Norway wants to divide the zone based on a middle line principle, Russia insists that a sector line principle is applie
(Barents Observer)


Gazprom discussed Shtokman timeline

The development of the first development phase of the Shtokman project was on the agenda when Gazprom Deputy Aleksandr Ananenkov today met with owner representatives of the Shtokman Development AG.

The meeting, which took place in the Moscow headquarters of Gazprom, discussed preparations for the development of the project, and especially issues related to time schedules in the project’s first development phase, a press release from the company reads.

The company in early February announced that the project launch will be postponed from 2014 to 2016 and that a final investment decision will be made only in 2011, and not in 2010 as earlier planned.

However, as reported by BarentsObserver this week, representatives of project partner Total maintain that the project is on schedule after all. That was also stated earlier by Gazprom Deputy Aleksandr Medvedev
(Barents Observer)

NO MORE GAS CRISES? (Niente più crisi del gas?)

Ukraine's President-elect Viktor Yanukovych is expected to reach out to Russia as well as the West to safeguard Ukraine's position as an important energy transit country.

Yanukovych won Sunday's presidential election duel against Orange Revolution hero Yulia Tymoshenko and is now expected to reform the Ukrainian gas sector. Nearly 80 percent of Russian gas exports to Europe are sent through Ukraine, satisfying one-fifth of the continent's demand.

Alexander Rahr, an analyst with the Berlin-based German Council on Foreign Relations, met Yanukovych at the World Economic Forum in Davos. Rahr said the Ukrainian leader told him about his plan to hand the Ukrainian gas network, which is in dire need of modernization, to a consortium comprised of Ukrainian transit companies [first of all, Naftogaz], Russian state-controlled energy giant Gazprom and Western European energy companies.

"Yanukovych does not want to give up Ukraine's role as an important transit hub," Rahr told UPI in a telephone interview Wednesday.

The balancing act is intended to please Russia as well as the West, after the confrontational course steered by Kiev and Moscow in the past years only damaged Ukraine's role as a reliable transit country.

Current President Viktor Yushchenko, who led Ukraine into two gas crises with Russia, was eliminated in the first round of voting.

In the aftermath of the first gas conflict between Ukraine and Russia, two major Russian-European gas pipeline projects -- Nord Stream in Germany and South Stream in southeastern Europe -- were jumpstarted in a bid to bypass Ukraine and deliver Russian gas unilaterally to Europe.

Yanukovych is eager to at least render insignificant South Stream, which is not as far advanced as Nord Stream, for which most of the pipes have already been delivered. Reports say South Stream could almost halve Ukraine's transit fees -- a disastrous outlook for the notoriously bankrupt country.

Rahr said the gas relations between Russia and Ukraine will thus remain highly political.

"Ukraine can't afford to pay the bills for Russian gas," which easily amount to $1 billion per month, Rahr said.

That's why Kiev is expected to please the Kremlin on other fronts, such as giving up plans to join NATO or allowing for the Russian Black Sea fleet to remain in Sevastopol.

"If that happens, then Ukraine will get the same price for gas as Belarus," which is on friendlier terms with Russia, and thus enjoys below-market prices.

Yet Yanukovych will also have to please the West to counter fears that he is turning his back on Europe.

While inviting European companies into the pipeline consortium, he is expected to further privatize the Ukrainian economy and include Western firms in that process.

"And he won't be able to question the plan to eventually join the European Union," Rahr told UPI. "That's where the Ukrainians want to go, because it's a well-functioning economic circle, and one that promises prosperity. In that regard, Russia is no alternative."
(Energy Daily)

SUSPICIOUS SILENCE. (Silenzio sospetto)

The recent signing of the Nabucco pipeline project is definitely a political rather than economic deal. Its feasibility, the probability of its actual construction and its profitability aside, the deal shows clearly that, at least for the present, those who want to see a weaker Russia prevail over those who would rather see it strong and an integral part of the West. It is also obvious that without heavy Washington lobbying the Nabucco pipeline would never take off. Since there is practically no economic interest for the U.S. in it, Washington politics make the direction of the much advertised "reset" quite uncertain.

In the last 20 years since the collapse of communism every U.S. president has kept repeating that it is in American interests to see Russia as a strong, democratic, and prosperous nation. But actions rarely suit the words. Washington needs, and often gets, Moscow’s cooperation on major security issues, but then it turns around and does its damnedest not only to prevent “non-democratic” and “authoritarian” Moscow from becoming an energy superpower, but to make sure that it gets as little cash as possible -- by diverting this cash to former Soviet republics where democracy is so rudimentary as to be barely discernible, while Oriental despotism, sometimes hereditary, is very much in evidence. So much for the hugely advertised U.S. democracy promotion mission.

OK, let us forget about democracy and get to real things. Has in the end Russia lost this round? What about another important problem for Nabucco - the Iranian connection? It is more or less obvious that this new pipeline will be extremely difficult to fill. If one excludes Russian and Iranian gas it would be practically impossible to do. That is why Turkey insisted that both Russia and Iran should be on the list of gas suppliers but then the whole idea of Nabucco of eliminating Russia from the supply equation did not materialize. Pretty soon the Nabucco lobbyists will have to face squarely some unpleasant questions: Why we should spend billions to enrich Iran or Russia? The next question will be what if both Russia and Iran say that they are not interested since they already have other gas delivery contracts through different routes? Will Nabucco actually bring Russia and Iran closer together to manipulate not only the gas supply line but geopolitics?

Russia provided so much help to U.S. and NATO in Afghanistan. It can do a lot more in Iran since practically the whole Iranian nuclear program is dependent on Russia, which makes RF the best guarantor of it being used for peaceful rather than military purposes.

Of course, Russia made a mistake in accepting Ahmadinejad’s claim for victory in the recent elections a bit too soon. The Iranian opposition is not crushed yet, and the final outcome is not too certain. More and more political leaders and even mullahs are switching sides. The Kremlin would be well advised to show some restraint or at least neutrality, to avoid a future backlash.

Another interesting observation is that Ukrainians, Poles and Balts are suspiciously quiet. They were quite vocal in protesting against the Nord Stream Project to connect Russia with Germany through the Baltic Sea. Ukraine was the most vocal opponent since Nord Stream will bypass it, thus depriving Kiev of the much needed currency and of any chance of blackmailing Russia by delaying gas payments. The Nabucco pipeline -- if it is ever built, of course -- will also bypass Ukraine, but so far it looks like their leaders do not seem to mind. Moreover, they are cheerleading it, so is there some secret protocol to Nabucco regarding Ukraine?

To sum up, the way things are now, the Nabucco project may end up as a hot air balloon, for its economics are pretty questionable while the politics surrounding it smells very bad indeed.

However, one good thing for Russia is that Nabucco should force it to be more aggressive in building the alternative Nord Stream and South Stream pipelines and at the same time spare no effort on its economy diversification so as not to depend too much on its natural resources.
As for Nabucco cheer leaders it is to early for them to celebrate. At the present time I’d not advise to buy the pipeline stocks to anyone but instead want to repeat to some narrow-minded folks that it is a lot more advantageous to have Russia as a friend rather than foe.
(Russia Blog)