Testing the Waters, by Tom Balmforth

Russia Profile

As Moscow and Ankara Strengthen Ties Through Energy Cooperation, Could Turkey Become the Fifth Country to Recognize the Independence of Abkhazia?

The two prime ministers’ meeting in Ankara yesterday resulted in a flurry of promises on energy cooperation between Russia and Turkey, signaling that the countries are getting closer in their partnership. Afterward, Russian Prime Minister Vladimir Putin said that Moscow would soon get the go-ahead to build a section of the South Stream gas pipeline on Turkish territory. His Turkish counterpart Recep Tayyip Erdogan revealed that Russia would soon gain a prime position in Turkey’s nuclear energy sector. Is this a big step for today’s Turkey-Russia partnership, and could it mean game, set and match for the rival Nabucco pipeline?

On November 10 Russia will receive official permission from Ankara to build the South Stream gas pipeline in Turkish waters in the Black Sea, Putin said after his meeting with Erdogan. South Stream is “very important not only for Turkey, but also for the entire continent,” said Russia’s prime minister. The arrangement marks the latest in a series of victories for the Russia-backed project over its EU-led rival, Nabucco, which seeks to diversify the sources of gas delivered to Europe while undermining Russia’s much cherished monopoly of supply.

Ankara has always cautiously backed both Nabucco as well as South Stream. So has Turkey now decided to cooperate closer with Russia and back South Stream? Some think so. The Kommersant daily yesterday quoted Gazprom officials as saying that Turkey could join Italy and Germany as Russia’s “strategic partner.” Italy’s ENI is co-funding the South Stream project, and Germany late last year gave its final approval for Nord Stream, sparking discontent on behalf of its east European neighbors. A Polish minister once compared the Russia-Germany Nord Stream project to the Molotov-Ribbentropp pact, because the pipeline allows Russia to continue delivering gas to Western Europe while still able to “turn off the taps” to Ukraine.

The tone of yesterday’s meeting did certainly hint at a closer Russia-Turkey relationship. Erdogan said that Russia’s AtomStroiExport was close to being contracted to build Turkey’s first nuclear power plant. The two prime ministers voiced hopes that Russia-Turkey trade would triple by 2015, having reached $33 billion (990 billion rubles) in 2008. And they announced plans to sign in a visa-free regime by May of this year. “In the end, without doubt, [a visa-free regime] will lead to activating cooperation between our countries,” said Erdogan.

But, of course, not all is quite so rosy. Chirvani Abdoullaev, the chief analyst for gas and oil at Alfabank, said there were still two potential points of difference. First of all, the end objectives of Moscow and Ankara in the energy sphere are not entirely compatible. As a country keen to become a hub for gas and oil, Turkey seeks diversity of supply, which runs counter to Russia’s aim of maintaining its monopoly of supply over Europe. “Turkey needs diversity of supplies to keep energy prices reasonably low and competitive, and in this sense Turkey and Russia differ in how they approach the natural gas issue,” said Abdoullaev.

Secondly, the entire rationale of South Stream, a pillar of the stronger Russia-Turkey relationship, could soon be brought into question. Russia has always blamed President Viktor Yushchenko’s Ukraine for the irregularities in gas supply to Europe caused by the Russia-Ukraine “gas wars.” Russia has therefore pushed hard for South Stream as an alternative, delivering Russian gas to Europe while bypassing Ukraine. However, a change of leadership in Ukraine now looks extremely likely. The first round of Ukraine’s presidential elections is slated for January 17, and the clear frontrunners, Yulia Tymoshenko and Viktor Yanukovich, both have much better relations with Moscow than Ukraine’s unpopular incumbent. So if the post-election Russia-Ukraine relationship blossoms, South Stream could suddenly lose its appeal. “If you can transport gas through Ukraine without a problem and it’s a stable regime… then most of these other projects, which were motivated by trying to avoid third party transit (Ukraine owns its transit network), these projects may not be needed,” said Abdoullaev.

But Alexander Rahr, the program director of Russia and Eurasia at the German Council on Foreign Relations, remains skeptical that the elections will improve the Russia-Ukraine relations. “I don’t expect this to be the result, even if Yanukovich wins,” said Rahr. “The problem is not the personalities in Ukraine; the problem is that Ukraine desperately needs the transit fees from Russian gas in order to survive as a state. Under every leadership, Ukraine will try to make use of its geographical position and the Russians realized this some time ago. This is why they desperately need a way to circumvent Ukraine,” said Rahr.

Turkey is therefore of crucial importance to Russia. And the potential for a strong relationship goes beyond just the realms of energy cooperation. Rahr suggested there were hopes in Moscow that Turkey could become the fifth country to recognize the breakaway republic of Abkhazia. Turkey’s official recognition of the South Caucasian republic would be a big victory for Russian foreign policy - the little-known South Pacific island of Nauru, populated by a meager 11,000 proud Nauruans, was the last country to do so, allegedly in return for Russia providing it with $50 million (150 million rubles) of humanitarian aid. “If any Western country is going to recognize the independence of Abkhazia, it will be Turkey because of a large Abkhazian diaspora there,” said Rahr.

So could relations flourish into a “strategic partnership” based on energy cooperation? “I think there is substance behind this - Russia wants to make Turkey its energy bridge to the west and exclude Ukraine from having this role. I am guessing that Russia is offering much more for this than we actually think,” said Rahr. Yesterday Russia did not quite get the green light to build the Turkish part of South Stream, but it got a promise. And simultaneously, Turkish-Russia relations seem to be making strides. “Turkey is playing a cautious game – it is trying to keep its options open,” said Abdoullaev. But sooner or later, it will have to make a decision.

Source: Russia Profile