Gazprom undermining NABUCCO

It has become evident recently that Moscow is very aggressively undermining the NABUCCO project. The Kremlin is trying its best to prevent NABUCCO obtaining a sufficient supply of natural gas.

The EU and NABUCCO-promoting countries wants to involve as many states as possible in the project to make it viable, and are therefore desperately looking for countries which can supply enough natural gas for the project to be successful. Moscow on its side is doing its best to influence potential suppliers in the contrary direction by offering them better prices for their gas.

The agreement on NABUCCO’s construction, which should have been signed at the beginning of July, has been delayed for a fortnight. Meanwhile Azerbaijan has signed an agreement to sell a certain amount of natural gas to Gazprom at a very high price and Gazprom has expressed its readiness to take more gas. The Azeri side seems quite satisfied with this deal, as it has killed two rabbits with one shot: on the one hand it has pleased Russia, from whom it expects a solution to the Karabakh conflict, and on the other hand it has shown Turkey that it can sell its gas for a better price if Turkey does not continue defending Azeri interests during its normalisation of relations with Armenia.

Today Ankara buys Baku’s gas at a very cheap price and no new tariffs has been negotiated yet. Turkey pays USD 120 per 1,000 cubic metres for it, whereas Gazprom is ready to buy Azeri gas at USD 350 for 1,000 cubic metres. Gazprom is also ready to buy the entire Azeri gas production at the same price, because this is a political price not a market one. Moscow is ready to pay that price to strangle NABUCCO and remain the sole supplier of Europe, with the ultimate aim of taking control of European markets and thus influence European policy by permanently blackmailing it.

A big multiplayer game is taking place, and it is difficult to predict in which direction it will develop. However one thing is obvious: the side which wants to win should timely make appropriate and very radical efforts to achieve its goal.