Nuclear Test

Alexander Jackson, senior editor at CRIA, an online journal covering the Caucasus and the surrounding region, has an interesting analysis piece looking at how the Iran nuclear issue might test Turkey's "zero problems with neighbors" foreign policy. From his piece (which includes some of my analysis):

Maintaining good commercial links with its neighbours is one of the central pillars of Turkey’s “zero problems with neighbours” approach. Widely lauded when it was developed by [Turkish Foreign Minister Ahmet] Davutoglu in the early 2000s, this policy is now coming under serious strain. Turkey is attempting to utilise its regional links, and [Prime Minister Recep Tayyip] Erdogan seems to think that by publicly supporting Iran, he can benefit the West by maintaining a channel of communication which no other country has.

As [Yigal] Schleifer points out, “this is a risky approach”. Playing a double game cannot be sustained forever, and neither Iran nor the West will be pleased if Turkey appears to be misleading them. At some point Ankara will have to choose between harming its commercial interests in Iran and damaging its relationship with Brussels and Washington (not to mention Israel).

This point looks to be arriving soon, as the Security Council moves towards a vote on a new round of economic sanctions. Voting “no” would cause disappointment if not anger in the Obama Administration, and could also – as Lesser observes – be a further blow to Turkey’s EU membership ambitions. Voting “yes” would cause a rupture with Tehran, with all the related political and economic implications. Abstention, the most likely course, would be a diplomatic fudge.

It would raise the question of whether the ‘zero problems’ approach can survive in moments of crisis, when hard choices have to be made. It also tests the limitations of that policy. Does Ankara even have the leverage to persuade Iran to accept a deal?

Foreign Minister Davutoglu seems assured – in recent weeks he has confidently stated that concrete progress has been made on the topic, presumably regarding a proposal to enrich uranium outside of Iran (Today’s Zaman, April 21). However to date he has offered no concrete indicators of success.

In addition, Tehran has responded politely to Turkey’s offers of mediation, but it may simply be stalling for time. No other friendly states – including Russia and China – have been able to negotiate a deal. Ankara’s enthusiasm and confidence may be seriously misplaced, especially if Mr Gul’s comments are seen in Iran as proof that Turkey’s public and private positions are different.

The issue goes to the heart of Turkey’s foreign policy vision. If Ankara cannot persuade its neighbour, with whom it has “very special” relations, to change its behaviour, then its claims to regional influence will look decidedly weaker to the West, as well as neighbouring states. Its economic, political, and cultural links with Iran will come to be seen not as assets, but as liabilities. By proclaiming its support of Iran so loudly, and by insisting on its unique ability to mediate in the dispute, Turkey may be setting itself up for a fall.

You can read the full analysis here.

Getting to Boring

I have a short analysis piece up in the new issue of the online magazine The Majalla. The question I was asked to answer was "Why Turkey Should Join the EU?" (from the Turkish perspective). The combination of Turkey's growing self-confidence on the world stage, the lack of political ambition being projected from Brussels and the economic turmoil in Greece certainly make it harder to make the case for Europe these days. Here's my take on why Turkey should still be keeping its eyes on the EU membership prize:

....many of Ankara’s long-term foreign policy objectives would get an important boost from a meaningful partnership with the EU. Turkey’s plan to turn itself into a major transit hub for oil and gas would be handicapped if the country were not fully integrated into Europe’s common energy policy and pipeline network. Meanwhile, Ankara’s plans to turn itself into a regional soft power broker, particularly in the Middle East, are tied up in being able to present Turkey as a “bridge” to Europe. Making that bridge easier to cross, something EU membership would do, would further enhance Turkey’s claim to being a country that spans East and West.

More significantly, EU membership will help Turkey overcome its domestic differences, which stand as the largest hurdle towards Ankara realizing the ambitious goals it has set out for itself. Ultimately, joining the EU—or at least meaningfully engaging in a process that would lead towards membership—offers Turkey the best chance at developing a political system that can successfully manage those dangerous divisions and blunt their impact.

Indeed, it’s important not to underestimate what a difference simply being engaged in the EU process over the last decade has made for Turkey in terms of developing civil society, strengthening institutions and the rule of law, and forming a polity that is learning to recognize and accept differences. The opening of EU-funded small business support centers in some of Turkey’s most impoverished areas and the training of lawyers and judges by European counterparts are not the kinds of trends that make headlines. Yet, they are the kind of low-profile projects that have helped make an impact on how the country operates.

Meanwhile, considering Turkey’s limited experience with true democracy—with its history of military coups, powerful nationalism and intense division based along ethnic lines—the promise of joining the EU has created am impetus for enacting reforms that the country might not have otherwise been implemented.

Joining the EU, as one analyst recently put it, is an essential part of Turkey becoming a member in good standing of the “rules and regulations community.” It sounds boring and it is boring. But after four coups and decades of bitter infighting, perhaps what Turkey needs is a bit less political turmoil and excitement, and a bit more of the boring stuff.

You can read the full piece here. Also, be sure to read Nicholas Birch's excellent Al Majalla cover story, which looks at the interplay between Turkey's growing trade and political involvement in the Middle East. The magazine also has two more takes on the Turkey-EU question, one by Huseyin Bagci, a professor at Ankara's Middle East Technical University, and Erdgal Guven, a columnist at Radikal. You can find their pieces here.

Accords in Discord

It appears that both sides in the shotgun wedding that is the stalled Turkish-Armenian reconciliation process might be looking for a way out. Ankara has warned Yerevan, in fairly strong terms, that the conditions that the Armenian Constitutional Court has put on the historic accords are unacceptable and could jeopardize the process. Yerevan, meanwhile, is reminding Ankara that it is the one that put preconditions on the process, by linking it to the Nagorno-Karabakh issue, and by letting the accords languish in parliament.

Milliyet's Semih Idiz has a good column in today's Hurriyet Daily News looking at how each side in the matter is giving the other one the excuse it needs to get out of the forced arrangement. From his column:

It is clear, however, that these protocols are not moving. There is a tangible reluctance and reserve on both sides in this respect. The Recep Tayyip Erdoğan government is not blameless either having effectively slapped a “Karabakh condition” on the ratification of the protocols by the Turkish Parliament.

Erdoğan boasts that “his government is one step ahead of the Armenian government,” having sent the protocols to Parliament for ratification. He argues that the rest is up to Parliament now.

In the meantime he keeps insisting that it is unlikely that Parliament will ratify the protocols, unless there is movement on the Karabakh front to Azerbaijan’s advantage.

This is completely disingenuous.

Erdoğan is playing to the political gallery because he knows there is serious opposition in Turkey to the protocols. If he wanted to show real leadership, however, he could guide his party, which has a majority in Parliament, to vote for the protocols without delay.

Some argue, of course, that many of Erdoğan’s own deputies would vote against the protocols given the sensitivity of all issues related to Armenia and Armenians. If so, that begs an even bigger question. Why did the Erdoğan government initiate this process in the first place then if it was not going to be able to complete it?

In the meantime, the confusing ruling of the Constitutional Court has given a fresh argument for those in Ankara who are reluctant about the Turkish-Armenian process.

Neither does there seem to be extreme enthusiasm in Yerevan over the issue.

The government there has said it will only endorse the protocols if the Turkish Parliament does and hence the current stalemate. It also appears to be doing little to support the protocols in public against harsh opposition and criticism.

Put openly, there is no will in Ankara or Yerevan at the present time to find a way to move forward in their ties. If there was, that way forward would be found regardless of the difficulties.

You can read the whole piece here. For some background on the accords and the hurdles facing them, take a look this previous post.

(Photo: the Turkish and Armenian foreign ministers shaking hands after signing their October accords agreement in Zurich.)

For Turkey and Armenia, a Roadmap's Final Destination Still Unclear

Last week's announcement by Turkey and Armenia that they have agreed on a set of protocols that will lead towards the normalization of their relations and the opening of their borders was certainly welcome news. A previous breakthrough in Turkish-Armenian reconciliation -- last April's vague declaration that the two countries had agreed on a "roadmap" for restoring relations -- quickly fizzled out when Turkish prime minister Recep Tayyip Erdogan declared that there would be no progress on the Armenian front until the "full liberation" of the Azeri territory of Nagorno-Karabakh, occupied by Armenian forces since 1993.

What's different this time around is the release of the detailed protocols, which offer a clear path towards the reopening of the Turkish-Armenian border and renewal of diplomatic ties between Ankara and Yerevan. But has Turkey really changed its position on the Nagorno-Karabakh issue? Will the Turkish parliament, which must ratify the protocols for them to take effect (as does Armenia's), support the move without any concrete action on the Nagorno-Karabakh front? From an analysis piece I have up on the Eurasianet website:

The Nagorno-Karabakh peace process is a complicating factor for the ratification of the protocols. Turkey is Azerbaijan’s strongest ally, and Ankara imposed its economic blockade on Armenia in 1993 to support Baku’s efforts to retain control over Karabakh. Currently, Armenian forces control Karabakh, along with large areas of Azerbaijan proper that surround the enclave.

The timing of the withdrawal of Armenian forces from occupied Azerbaijani lands is one of the primary sticking points in the Karabakh peace process.

The announcement last April of the existence of a "roadmap" to renew ties between Turkey and Armenia led to a strong backlash from Baku, and to what seemed like a stepping back from the deal on Ankara’s part.

During a May 14 address to the Azerbaijani parliament, Turkish Prime Minister Recep Tayyip Erdogan declared "that the border between Turkey and Armenia will be open only after the full liberation of Azerbaijani occupied territories."

Although the recently released protocols make no mention of a linkage between the normalization of Turkish-Armenian ties and the Karabakh peace process, "there’s no doubt that the Karabakh issue looms over this reconciliation process," says Kiniklioglu.

"If there is no movement on Nagorno-Karabakh, it will be up to the Turkish parliament to assess the situation and judge accordingly."

Observers believe the Turkish government is now counting on international pressure to increase on Armenia and Azerbaijan to reach some kind of agreement regarding the disputed territory. Although the AKP has a majority in parliament, many observers believe that it will be difficult to ratify the protocols without any movement on the Nagorno-Karabakh front.

"Erdogan obviously feels that Turkey wants to see something on Nagorno-Karabakh before they can take it to parliament. The problem is [that the protocols are] in Turkey’s interest, even if nothing happens on Nagorno-Karabakh. Turkey’s overwhelming national interest is in putting this Armenian problem behind it," says Hugh Pope, a Turkey analyst with the Brussels-based International Crisis Group.

Over at Today's Zaman, the Brookings Institute's Omer Taspinar also takes a look at last week's announcement, saying it might be a bit to early to break out a bottle of "nice Caucasian champagne to celebrate." The protocols being ratified by both the Turkish and Armenian parliaments is a big "if," Taspinar says. Reminding readers that this breakthrough in Turkish-Armenian relations started with Turkish president Abdullah Gul going to Armenia for a World Cup qualifying game between the two countries' national teams, Taspinar writes:

The good news is that the so-called “soccer-diplomacy” is alive and well. The not so good news is that we are still at halftime, and the fanatic supporters of the two national teams can cancel the game or disqualify their teams by throwing sharp knifes on the field....

....So, last week's announcement comes just in time to maintain the façade of Turkish-Armenian reconciliation. If no sharp knives are thrown onto the field, soccer diplomacy will inch forward. It may still be too early to speak of a genuine rapprochement between Ankara and Yerevan. Yet, no one accuses the two parties of not trying. Negotiations between stubborn neighbors are never easy. But as Winston Churchill wisely said, “To jaw-jaw is always better than to war-war.”

So where is this Turkish-Armenian "roadmap" actually going to lead to? The next few weeks will give a clearer indication of that. One thing is clear: the protocols agreed upon by Ankara and Yerevan might not refer to Nagorno-Karabakh, but the "roadmap" for Turkish-Armenian reconciliation leads straight through the heart of that disputed territory.

Dueling Pipelines and Turkey’s Delicate Energy Dance

A few weeks ago, Ankara was the scene of the celebratory signing of an intergovernmental agreement for the troubled Nabucco pipeline project, designed to weaken Russia’s grip on Europe’s energy supply by bringing Caspian and Middle Eastern gas to the continent via Turkey and the Balkans. (For more background on Nabucco, take a look at this series of posts from Istanbul Calling.) Although the pipeline is still far from becoming a reality, the signing in Ankara was hailed as an important step in helping Europe diversify its energy supply.

Cut to last week, when Ankara was the scene of the signing of another series of energy-related agreements, only this time with Russian Prime Minister Vladimir Putin. Among the agreements signed was one that would allow Russia’s proposed South Stream gas pipeline – seen as a potentially lethal rival to the Nabucco project – to run through Turkish waters on the Black Sea.

What’s going on here? Had Ankara just stabbed Nabucco (and the European Union, it’s main supporter) in the back? Turkish officials clearly don’t want things to look that way, with “diplomatic sources” telling the English-language Hurriyet Daily News that “Nabucco is still [Turkey’s] priority.” That might be the case, but Ankara certainly also knows that as it moves along on Nabucco, it also needs to keep Moscow’s interests in mind. If anything, the recent dueling signings in Ankara serve as a good example of the delicate dance that Turkey now has to perform as part of its new, multi-polar foreign policy, which seeks to minimize conflict with its neighbors while also raising the country’s regional and international profile. As political scientist Bulent Aras points out in a new report he wrote on Turkish-Russian relations for the Foundation for Political Economic and Social Research (SETA), an Ankara-based think tank: “Under the strong influence of its new geographic thinking toward Russia, Ankara tries to avoid taking sides in any ‘Russia versus the West’ struggles, while developing its own relations with Moscow.”

From being intense regional rivals and then Cold War foes, Turkey and Russia have moved towards being strong partners in trade, defense and energy. That said, Turkey – like Europe – also finds itself heavily dependent on Russian energy supplies, importing 63 percent of its gas and 28 percent of its oil from Russia. It is now also working out terms with a Russian company to build Turkey’s first nuclear power plant, something that critics say will only deepen the country’s dependence on Russia. Still, Ankara policymakers realize that working together with Russia makes more sense for Turkey than antagonizing it.

But as Aras points out in his SETA report, this new approach to Russia will not be without its limitations:

“There is no guarantee that the Turkish politicians’ projection of good relations with Russia will be possible without endangering its relations with the EU and the US….

…. The current developments indicate that Turkish and Russian policy-makers have the political will to improve bilateral relations in the realm of politics, economy and security. However, these relations are not free of a number of serious problems that could threaten a derailing in the growing ties; both countries have converging and conflicting interests in neighboring regions. This fact, in combination with the high-profile status of both countries, makes Turkish-Russian relations promising, yet difficult.”

Nabucco's New Start

I have a piece up on the Eurasianet website looking at the implications of the Nabucco pipeline agreement signed yesterday in Ankara. From the article:

The troubled Nabucco pipeline project -- designed to diversify Europe’s energy supply and loosen Russia’s grip on the continent’s natural gas market -- took a major step forward on July 13 with the signing of a transit agreement between Turkey and five European Union countries involved in the undertaking.

The 2,050-mile-long (3,300 kilometer) Nabucco pipeline is designed to bring gas from the Caspian Basin and the Middle East to European markets via Turkey, Bulgaria, Romania, Hungary and Austria. The $10-billion pipeline is scheduled to start operating in 2014. Nabucco’s primary objective is to lessen Europe’s overdependence on Russia for gas. Moscow currently supplies approximately 40 percent of Europe’s gas.

Although the signing is being hailed as an important statement of intent, experts caution that Nabucco still faces major hurdles, particularly regarding where the pipeline’s projected annual need of 31 billion cubic meters of gas will come from. "Now that the agreement is being signed, frankly an even more difficult process begins, as to what will fill the pipeline," says Bulent Aliriza, director of the Turkey Project at the Center for Strategic and International Studies in Washington. "Signing the agreement was the easy part."

Despite the signing, there are still no concrete agreements covering Nabucco’s supply. Azerbaijan is currently the most likely supplier, but it can’t fill Nabucco on its own. Other possible sources include Egypt, Syria and Iraq, whose Prime Minister, Nuri Al-Maliki, attended the signing ceremony in Ankara. Turkmenistan also has indicated that it wants to be a supplier.
Another possible, though contentious, supplier would be Iran, which has some of the world’s largest gas reserves. But European Union officials said that, for now, they are ruling out Teheran’s participation. "Iran has major gas reserves and will surely export them one day, but today it imports gas. On top of that, there are the political and legal issues," Andris Piebalgs, the European commissioner on energy issues, said in an interview with the Hurriyet Daily News and Economic Review, a Turkish English-language daily. "Until the outstanding questions are solved, Iran will remain a difficult option."

A similar message was given by Richard Morningstar, the United States special energy envoy, who also attended the signing ceremony. "With respect to Iran, our position is very clear. We do not think that Iran should participate at this point," Morningstar told reporters.
The question of supply for Nabucco may become a race against time, given that the route faces stiff competition from other projects, particularly South Stream, which would carry Russian gas under the Black Sea to Bulgaria, from where it would continue to other parts of Europe….

…. With the signing of the transit agreement, which brings together Nabucco’s major stakeholders, it appears that the project’s planners are following the blueprint laid down by the successful Baku-Tbilisi-Ceyhan (BTC) pipeline, which transports oil from Azerbaijan to Turkey’s Mediterranean coast via Georgia. Like Nabucco, BTC -- which started pumping oil in 2006 -- is designed to diversify the West’s energy supplies and provide a supply route that avoids Russia. Also like Nabucco, the BTC project faced massive obstacles and no shortage of skeptics who said it would never be built.

"If you look back to the BTC struggle, it’s clear that [the planners] are, to a certain extent, following the same path," says CSIS’s Aliriza. "Signing an inter-governmental agreement like this opens up the way to eventually finishing the project."

But Aliriza also warns that there is a difference this time around. When BTC was being planned, Russia was not the energy power that it is today. Russia’s political and commercial ties with some of the countries involved in Nabucco, particularly with Turkey, have also deepened in recent years. "Given all the leverage that Russia can bring to bear makes certain that the BTC analogy doesn’t really apply," he said.

You can read the full article here.

A Boost for Nabucco?

The troubled Nabucco gas pipeline project, the subject of several previous posts, is about to get what could be an important boost. On Monday, Turkey will host a signing ceremony for a series of agreements that are supposed to give more definition to what so-far has been a rather hazy proposition. The agreements will be signed by the five transit countries that the Nabucco pipeline will go through: Turkey, Bulgaria, Romania, Hungary and Austria.

Although the signing ceremony is a giant step for Nabucco, critics point out that still left unresolved is the problematic question of Turkey's demand that 15 percent of the gas that will go through the pipeline be given to it for its domestic use or for re-export. The European Union has said the Turkish demand is unacceptable. Monday's ceremony, though, may be a sign that both sides foresee a resolution to that issue.

I'll have more about this next week. For now, take a look at this useful Q&A Reuters has put together about Monday's signing ceremony and what it means.

For Nabucco, Is It Kurdistan to the Rescue?

I have a piece up on Eurasianet looking at the possibility of supply from gas fields in northern Iraq breathing new life into the troubled Nabucco pipeline project (for some background, take a look at this previous post, as well as this one). The "Kurdish" gas option adds an interesting twist to the Nabucco story, although it's clear nobody checked with Baghdad before they announced that Iraqi gas would save the struggling pipeline project. From my article:

Could supplies from gas fields in northern Iraq breath new life into the troubled Nabucco pipeline, a project designed to free the European Union from Russia’s virtual gas supply monopoly?

That was certainly the hope created by the May 17 announcement that a consortium of European and Middle Eastern energy companies completed a deal to develop gas resources in Northern Iraq, part of which would be used to kick start the flow of energy via the long-stalled Nabucco route.

"It’s an important and promising development for the acquisition of a huge volume of natural gas for Turkey and for Europe via Nabucco," the pipeline project’s managing director, Reinhard Mitschek, said of the $8 billion deal between Austria’s OMV AG and Hungary’s MOL, and the United Arab Emirates’ Dana Gas and Crescent Petroleum, which currently operate a gas site in northern Iraq.

Representatives of the UAE companies said they believe the Iraqi fields could supply up to 3 billion cubic feet of gas per day, which is what Nabucco is being designed to carry. Crescent’s executive director, Badr Jafar, said the projected volume was sufficient to justify the construction of Nabucco.

But experts are warning that Iraq’s internal political squabbles may make it difficult for gas from the country’s north to make it to Europe. The Kurdish Regional Government (KRG) controls Northern Iraq, but the central government in Baghdad has rejected the KRG’s attempts to make independent energy deals.

On May 18, a day after the deal between the European and UAE firms was announced, Iraqi Oil Minister Hussain al-Shahristani slammed the proposal. "We will not allow any side to export gas from the region without the approval of the central government and the Iraqi Oil Ministry," he said. Baghdad has previously blacklisted companies that have made independent deals with the Kurdish administration in northern Iraq.

"I don’t think there will be permission for both the development and the export of that gas before the problems between the central government and the KRG are solved," says Necdet Pamir, an energy analyst based in Ankara.

"There is a strong reaction from the Iraqi government to the announced deal and there may be some restrictions put in place. I don’t think in the short term such a development will be fulfilled. This is just wishful thinking right now," he added.

Nabucco’s proposed northern Iraq connection came to light just two days after Russia signed deals with Bulgarian, Greek, Italian and Serbian energy companies to facilitate the construction of a rival pipeline, dubbed South Stream. Those pacts seemed to signal the death-knell for Nabucco, which has been plagued for years by questions about profitability.

Announcing the Iraqi connection may have been a way for Nabucco supporters to make a statement that they won’t be going away anytime soon. "Desperate times call for desperate measures. A few years ago, the Iraqi supply would have been further down the list, but now it’s seen as more of a possibility," said Amanda Akcakoca, an analyst at the European Policy Centre, a Brussels-based think tank....

....The failure of the Iraqi connection to materialize for Nabucco would mark just the latest in a series of setbacks for the pipeline project. Two problems that continue to hover over Nabucco are a lack of reliable suppliers and disagreements between the European Union and Turkey over transit fees. According to recent reports, a May 8 meeting in Prague between the EU and countries involved in the pipeline project may have achieved a breakthrough in disputes between Brussels and Ankara, but Nabucco is still very much in danger, experts say.

"Within EU circles everyone is still talking about Nabucco positively, but if you talk to experts, most of them say it is dead," says Akcakoca.

"Perhaps they [analysts] re being too pessimistic, since Nabucco is still on the table and if enough of the right political and financial support were put behind it, it would still have a chance," Akcakoca continued. "The situation in Iraq itself makes it unlikely as a primary source for Nabucco. The main sources still remain in Azerbaijan and Central Asia."

You can read the full article here.

(Photo - A gas extraction plant in northern Iraq)

Energy Security vs. Strategic Insecurity

A followup to the other day's post about the Nabucco pipeline project. At the heart of the project lies the increasingly important policy question of “energy security” – how countries can secure diverse sources, particularly of oil and natural gas, and diverse supply routes. One of my concerns is how to keep the search for energy security from becoming an adversarial and short-sighted one that will only lead towards greater insecurity.

As the Associated Press reports, a new Kremlin "National Security Strategy" paper puts battles over energy resources as one of the major challenges facing Russia. From the report:

A Kremlin policy paper says international relations will be shaped by battles over energy resources, which may trigger military conflicts on Russia's borders....

"....The international policy in the long run will be focused on getting hold of energy sources, including in the Middle East, the Barents Sea shelf and other Arctic regions, the Caspian and Central Asia," said the strategy paper that was posted on the presidential Security Council's Web site.

"Amid competitive struggle for resources, attempts to use military force to solve emerging problems can't be excluded," it added. "The existing balance of forces near the borders of the Russian Federation and its allies can be violated."

The Kremlin's thinking certainly seems in line with what's being considered in the United States and Europe. I recently came across a 2008 article entitled “The Militarization of Energy Security,” which appeared in an online journal published by the  Naval Postgraduate School in Monterey, California, and was written James A. Russell and Daniel Moran, lecturers at the school. “It is in the energy sector that strategic planners now find it easiest to imagine major states reconsidering their reluctance to use force against each other," the authors wrote.

"‘Energy security’ is now deemed so central to ‘national security’ that threats to the former are liable to be reflexively interpreted as threats to the latter. In a world in which territorial disputes, ideological competition, ethnic irredentism, and even nuclear proliferation all seem capable of being normalized in ways that constrain the actual use of military force, a crisis in global energy supply stands out as the last all-weather casus belli when the moment comes to hypothesize worst-case scenarios.”

New Life for Nabucco?

The Guardian is reporting on what may be a major breakthrough for the troubled Nabucco pipeline project (which was previously discussed in this post). Designed to break Russia's almost monopolistic control over Europe's energy supply, the pipeline would bring natural gas from the Caspian region and the Middle East to European markets via Turkey. Up until now, Nabucco has been dogged by questions over who will be part of providing its supply and by Turkish haggling over transit fees. 

Following a recent summit in Prague that brought together the project's key players, it appears that Nabucco is being given a new lease on life. From the Guardian's report:

The European Union and Turkey have struck a ground-breaking gas pipeline deal unlocking a potential energy bonanza in the Caspian basin after more than a year of deadlock, according to senior EU officials.

The agreement, to be signed in Ankara on 25 June, represents a major boost to the EU's ill-starred Nabucco pipeline project, which is intended to transport natural gas to Europe from central Asia, the Caucasus and the Middle East, and is the key to breaking the Kremlin's stranglehold over Europe's gas imports. "This is a complete breakthrough," said a senior EU official involved in the tough negotiations with Turkey. "The Turks have accepted our terms. There is no conditionality."

The €9bn Nabucco project is at the centre of a contest pitting Russia against the EU and involving Turkey, Germany, Austria, Azerbaijan and the authoritarian regimes of central Asia in the effort to secure Europe's gas needs while curbing the hold Moscow and the gas monopoly Gazprom have over the supply lines. The case for Nabucco is debated, but was reinforced by Russia's gas war with Ukraine in January, which caused havoc with Gazprom supplies to eastern and central Europe. There had been similar disputes in 2006 and 2007.

Nabucco, stretching more than 2,000 miles from Turkey's eastern border to Europe's main gas hub outside Vienna, would be the main route for pumping gas to Europe not controlled by Gazprom. But the plan had faltered over deadlock between the EU and Turkey over the pipeline transit agreement. More than half the pipeline is to be located in Turkey, making it the gatekeeper of Europe's energy supplies.

Ankara has been driving a hard bargain, insisting on collecting a "tax" on the gas being pumped and demanding 15% of the transit gas at discounted prices. This, say EU officials and the six-company consortium that is to build and run the pipeline, would render Nabucco financially unviable.

The stalemate was broken at a summit in Prague last Friday between the EU and the countries involved. "The 15% demand has gone," Andris Piebalgs, the EU commissioner for energy, told the Guardian. "We've agreed on cost-based transit. We're very close to a conclusion." A senior Czech official organising the summit likened the negotiations to "bargaining in an Istanbul souk", while an EU envoy to the region worried that "nothing is done until it's done".

But the European commission president, José Manuel Barroso, said President Abdullah Gül of Turkey assured him the deal would be signed within weeks. "That's what President Gül told me," he said....

....As well as Nabucco, the Europeans spoke specifically for the first time about supporting the building of a pipeline under the Caspian Sea connecting Turkmenistan and central Asia to Azerbaijan. The central Asian gas was up for grabs, said the senior EU official, and if Europe did not get there first, it would go to Russia or China.

If Nabucco is to happen, it will initially need the gas from Azerbaijan's BP-run Shah Deniz-2 field. But officials in Brussels view Turkmenistan, with its vast gas deposits, as the key to its longer-term viability.

The Russians are pressing the central Asians and Azerbaijan hard to try to put a stop to Nabucco and retain control of all the supply routes to the west. The Turkmens attended the Prague summit, but declined to commit, apparently deciding to try to play the Russians off against the Europeans.

You can read the full article here.

Getting Nabucco off the ground would be a major triumph for the EU and a good sign that the bloc is starting to formulate a more cohesive energy policy. What should be remembered, though, is that once built, the Nabucco pipeline will supply only a fraction of Europe's gas supply. Creating an energy supply that is truly secure -- in terms of diverse sources and supply routes -- will require more long-term thinking and planning.

Curtains Rising or Falling on Nabucco?

Named after a popular Verdi opera that tells the story of the Jews’ liberation from exile in Babylon, the troubled Nabucco pipeline project – designed to wean Europe off its dependence on Russian gas – has enough drama surrounding it that it could very well inspire an opera production of its own. There would be villainous Russians, cantankerous Turks, bumbling Brussels bureaucrats and a chorus of shivering Bulgarians begging to be delivered from clutches of Gazprom.

The 12$ billion, 2,050-mile long (3,300 kilometer) pipeline is designed to bring gas from the Caspian region and the Middle East to European markets via Turkey, Bulgaria, Romania, Hungary and Austria. Construction is scheduled to start in 2010 and the pipeline is expected to start delivering gas three years later. That’s the plan, at least.

But most experts warn that Nabucco faces major hurdles, the biggest one being just how to fill the pipeline with gas. So far, only Azerbaijan has signed on to providing gas for Nabucco, but it can only fill a fraction of its capacity. Turkmenistan is an option, but there are logistical problems with getting its gas to the pipeline. The best answer for filling Nabucco, in many ways, is Iran, which has huge gas reserves. But both the United States and the European Union are currently opposed to making the Iranians part of Nabucco for political reasons.

Meanwhile, while Turkey’s role as a transit route for the pipeline is crucial, Nabucco is under threat of being held hostage to the politics surrounding Ankara’s beleaguered EU membership bid. During a recent visit to Brussels, Turkish prime minister Recep Tayyip Erdogan said that if the opening of the accession talks’ energy chapter is blocked, Turkey “would of course review our position [on Nabucco].” (Although Erdogan quickly backtracked, Germany’s Economy Minister Michael Glos accused Ankara of engaging in “political blackmail.”)

Nabucco is even under threat of being undercut by Moscow, which is suggesting Europe diversify is gas shipment routes (though not its supply) by the construction of South Stream, a pipeline that would bring Russian gas under the Black Sea to Bulgaria.

“What we have is a series of agreements and a theory,” says Bulent Aliriza, director of the Turkey Project at the Center for Strategic and International Studies in Washington, about Nabucco. “It’s got problems all the way down the line.”

The good news for Nabucco’s backers is that the recent gas dispute between Russia and the Ukraine, which left large parts of Europe shivering in the cold, might breath some new life into the pipeline project. The Hungarian government is today hosting a high-level summit for the various governments involved in Nabucco and there are hopes that the Russia-Ukraine row might push all the actors to get more serious about making the pipeline a reality.

Of course, even if Nabucco were built, it would still need to be seen as only part of a wider energy security and diversification program for the EU. To put things in perspective, while Europe’s annual gas demand is around 500 billion cubic meters (and growing), Nabucco is designed to carry only about 31 bcm annually. So, although it’s an alternative, it’s far from the answer to the EU’s energy woes.

“Simply building a pipeline slightly south is not a strategic issue; it’s a regional one,” says Andrew Monaghan, a research advisor at the NATO Defence College in Rome who recently wrote a paper examining Nabucco for the European Parliament. “What I’m saying is that we should consider enhancing the process, not simply changing the line and hoping that will create a better picture.”

For more on Nabucco’s prospects, take a look at my recent article in the Christian Science Monitor. An article on the Eurasianet website, tackles the thorny issue of Iran’s possible involvement in the project.

UPDATE -- As Reuters reports from the summit in Budapest, the EU is offering support for Nabucco in the way of possible loans, but is not ready to give direct financial support for the project.