[OPINION] No ‘stream’ left behind

January 03, 2012, Tuesday/ 13:25:00

In a recent and very nicely done article about Turkish foreign policy in 2011 (Sunday's Zaman, Jan. 1), Amanda Paul mentioned that “Kyiv, which believed it was building a strong partnership with Ankara, following yet another visit of Ukraine's leadership to Ankara, has been left devastated” after “a New Year's gift for Russia,” namely an agreement with Turkey on the South Stream pipeline, became a reality.

Well, it is true: Kyiv believes in strong and mutually beneficial partnerships and exerts serious efforts to achieve this goal. In this context, it is important to stress once again that partnerships with Russia, the European Union and Turkey are among our priorities. And developing cooperation in the field of energy is definitely one of our priorities, too.    

In fact, Europe's energy security is serious business and must be addressed seriously. Ukraine has always been a reliable and predictable partner to all parties in the energy equation, and this will remain so. We believe that our gas transportation system is the best and most comprehensive answer to the growing needs of consumers (Turkey included) and producers (Russia first of all). It is the cheapest and most reliable way to transport up to 200 billion cubic meters of gas from the East to the West. Statements that our gas transportation system is on the verge of collapse are completely and absolutely groundless. As the leaders of Gazprom have themselves acknowledged, even if all “streams” are built, the Ukrainian gas transportation system will be needed to satisfy the needs of Europe. So we are going to maintain dialogue with the Russian Federation and with European partners, trying to persuade them to participate in the modernization of the Ukrainian network of transit pipelines rather than spend money on South Stream. Modernization is needed to increase its efficiency and capacity, and this should be of prime interest for both producers and consumers. It is 10 times cheaper than building “streams.”

Everyone in Ukraine, Europe and even Russia understands that South Stream has always been a political project, which has nothing to do with economic reasons or energy security. Certainly there are better ways to spend $20 billion than to throw the money deep down into Black Sea waters. But it is a sovereign right of Turkey and the Russian Federation to deal with South Stream as they deem appropriate, and no one is going to question this right. Let us just consider several expert points related to this issue.

First, as far as is known from the press, the Turkish and Russian governments have been working on the deal since 2009. Initially, the deadline was set for the end of 2010, but for different reasons, it was postponed by a year. During this year, Europe, being a major consumer of Russian gas, a possible investor and South Stream's sole destination, took a recession-related dive, which generated a big question mark over whether the EU members of the South Stream enterprise have enough resources to invest in this expensive deal. Germany should probably be excluded from the list – it has its own North Stream now and a lot of headaches in rescuing the euro, too.

Second, it is not Turkey but EU legislation that has been and still is a major obstacle to South Stream. The Third Energy Package that came into force in September 2009 does not permit the ownership of the pipeline by the gas producer. No wonder Gazprom has made serious efforts aimed at getting South Stream excluded from this legislation. The EU refuses to exclude it, so far. So, once the proposed pipeline enters EU territory (probably in Bulgaria), the unbundling comes into force. Yes, it is not an easy task to enforce this legislation, but it looks like the European Commission is serious about doing just that. Energy Commissioner Günther Oettinger has said many times that South Stream is not a top priority project for the European Commission, and once in EU territory, it will be subject to the Third Package.

Finally, clear project papers and calculations are still pending for South Stream, and there are a couple of unresolved issues about who will finance it, where the gas will come from, who will buy it and for what price, etc. We are open to fair dialogue with all parties to answer those questions with the good will to guarantee Europe's energy security for decades to come. We do not believe in “streams,” we believe in partnerships. Turkey is included among the top of the list.

Dr. Sergiy Korsunsky, Ukrainian Ambassador to Ankara

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