CC BY
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Arbakhan MAGOMEDOV
D.Sc. (Political Science), Professor, Head of the Public Relations Chair, Ulyanovsk State University (Ulyanovsk, Russian Federation).
Ruslan NIKEROV
Ph.D. Candidate at Ulyanovsk State University (Ulyanovsk, Russian Federation).
THE SOUTH STREAM VS. NABUCCO: THE "PIPELINE WAR" GAINS MOMENTUM
Abstract
The authors scrutinize the hottest stage of one of the most acute geopolitical rivalries in the Caspian-Caucasian region between Nabucco (the EU's pet project) and the South Stream promoted by the Russian Federation. We are watching another round of the real-life gas war that is unfolding in the context of the mounting demand for natural gas created by the tech-nogenic disasters that damaged the nucle-
ar power stations in Japan and the string of statements on the repudiation of nuclear power coming from Europe, particularly Germany. The rivalry is dynamically escalating according to the "zero sum game" scenario, where the defeat of one side means the victory of the other. The conflict between the two gas pipelines is a result of the sides' mutual dependence and the steadily depleting natural resources.
I n t r o d u c t i o n
The South Stream vs. Nabucco is one the fiercest battles over Europe's energy future, the impact of which on the destinies of the Caucasus and Central Asia cannot be overestimated. We have already
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written about the intense struggle between the two routes,1 in which Moscow seemed to be gaining the upper hand, while Nabucco, the symbol of Europe's energy freedom, has been sinking. Our own announcement of Nabucco's quiet death made at the turn of 2010 proved to be premature.2
The rivalry is unfolding amidst risky commercial deals, reckless bluffing, theatrical gestures, vague promises, and diplomatic fistfights; however the natural and technogenic disasters in Japan and the social revolutions in North Africa in the spring of 2011 supplied a very different background for a new bout of the old rivalry.
The interconnected events of the spring and summer of 2011 added fresh vigor to the already acute competition. Alarmed by the disaster at the Fukusima-1 nuclear power station, the world increased its demand for natural gas as a much safer option. The civil war in Libya put the local oil and gas industry out of business, which forced Italy to turn to Russia for larger amounts of natural gas, and the German government's statement late in May 2011 to the effect that all nuclear power stations in Germany would eventually be closed down added fuel to the fire by raising the demand for gas even more. Alexey Miller, who heads Gazprom, Russia's gas monopolist, informed President Medvedev that in the first five months of 2011 Russia had exported more than 25 bcm of gas compared to the same period of 2010. He specified that Europe's record gas demand was created by the events in the Middle East, North Africa, and Japan. In April of this year, Gazprom sold over 21 percent more natural gas to Europe than in April 2010. The company revised its own assessment of the European demand for natural gas, which coincided with the forecasts of the European energy companies. OMV AG Executive Director Dr. Gerhard Roiss, for example, corrected the previous forecast of an annual 150-bcm difference between gas demand and supply by the year 2025, saying that now the difference was predicted to be 180 bcm annually.3
One after another, Western journalists and analysts have begun talking about the "golden age of natural gas." Gay Chazan of The Wall Street Journal and Xavier Blas of The Financial Times were among the first, one day after the other, to trumpet the beginning of the golden age.4 International energy institutions echoed the media. The International Energy Agency (IEA) of the Western countries readily agreed that the events of the spring of 2011 had ushered in a "golden age of natural gas." It predicts that in the next 50 years the world might use over 50 percent more natural gas than today, which means that in 2035 natural gas will cover over a quarter of the world's total energy requirements compared to 21 percent today.
In the spring and summer of 2011, the Nabucco-South Stream rivalry began unfolding with unprecedented speed.
The Nabucco Gas Pipeline System: from a European Business Idea to Unrestrained Politicization
The pipeline with its memorable name was intended as Europe's response to its growing dependence on Russian hydrocarbons. The 3,900 km-long pipeline was expected to move a total of 31 bcm of
1 See: A. Magomedov, R. Nikerov, "Caspian Energy Sources and the 'Pipeline War' in Europe in the 21st Century: Energy Geopolitics in Northern Eurasia," Central Asia and the Caucasus, Vol. 11, No. 3, 2010, pp. 7-18.
2 See: A.K. Magomedov, R.N. Nikerov, Bolshoy Kaspiy. Energeticheskaya geopolitika i tranzitnye voyny na etapa-kh postkommunizma, UlGTU, Ulyanovsk, 2010, pp. 204-208.
3 See: S. Kulikov, "'Gazprom' dovolen rostom prodazh. Rossiiskiy monopolist snova ispolnen optimizma," Neza-visimaia gazeta, 30 May, 2011, available at [http://www.ng.ru/economics/2011-05-30/1_gazprom.html].
4 See: G. Chazan, "Natural Gas Entering 'Golden Age'," The Wall Street Journal, 6 June, 2011; X. Blas, "Golden Age of Gas May Be a Call Too Soon," The Financial Times, 7 June, 2011.
Caspian and Mid-Eastern gas from Turkey to Austria, bypassing Russia, across Bulgaria, Rumania, and Hungary to a hub in Vienna from which the gas was to go on to EU members. The consortium consists of RWE of Germany, OMV of Austria, MOL of Hungary, BOTA§ of Turkey, the Energy Holding of Bulgaria, and Transgaz of Rumania with equal shares of 16.67 percent each.
At an initial cost of about $11 billion, the pipeline was expected to move Caspian and Mid-Eastern gas across the Anatolian Plateau to Europe; the European Union is actively promoting the project and is prepared to fund at least part of it; and the United States has moved in with political and moral support.
It started as a joint business venture of the countries seeking gas supplies from the Caspian and the Middle East, the prospect of collecting transit fees being an additional alluring factor.
In The Great Pipeline Opera, Daniel Freifeld tells the story of how the pipeline got its name. It all started when one evening in Vienna in 2002 the Turkish, Hungarian, Bulgarian, and Rumanian colleagues of a group of Austrian executives were invited to see a rarely performed Verdi opera which recounted the hard plight of Jews deported to Mesopotamia by King Nebuchadnezzar (Nabucco), who in the finale set the Jews free. "The officials had spent the day elaborating a plan for a 2,050-mile pipeline that could transport up to 1.1 trillion cubic feet of natural gas every year across their countries to the European markets. The sources of this gas would not be Russia, but Azerbaijan"5 and the Middle East. The opera they heard after a day of arduous work was called Nabucco, the name the European managers chose for their project.
Map 1
The Rivaling South Stream and Nabucco Gas Pipelines
5 D. Freifeld, "The Great Pipeline Opera," Foreign Policy, 24 August, 2009.
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After a while the pipeline gathered political overtones, its business rationale being pushed onto the backburner. Nabucco became another political weapon to be used against Russia and its influence in Central and Eastern Europe. The Americans encouraged the European Nabucco-ites with talks about it being a symbol of European solidarity, "a modern-day Maginot pipeline" in the face of Russia's domination in gas supplies. Some journalists went even further: Russian gas and oil replaced the Cossack squadrons of the 19th century and the tank divisions of the 20th century as instruments of political control over Europe.
In the fall of 2010, when in Brussels, the observers were baffled by the confusion among the Europeans.6 It looked like a Quixotic project to many, an idée fix of the United States, or a secret (carefully concealed) mania of the European political establishment. The skeptics marveled at the enthusiasm over Nabucco, which never seemed to wane despite the obviously inadequate resource base, thus inviting numerous sarcastic comments. Alexey Miller of Gazprom allowed himself a condescending comment: "Nabucco is still an opera."
Marcus Balser of Sueddeutsche Zeitung wrote: "Was the name a wise choice? This is what managers are asking themselves along with many others. It became clear long ago that this multibillion project had many more things in common with the opera than its managers would have liked."7 This is by far the most sarcastic comment. On 30 September, 2010, American observer Stephen Lev-ine contributed an article to the Foreign Policy magazine under the telltale headline of "The Pipeline that Refuses to Die," in which he wrote: "What do big Eurasian energy pipelines have in common with U.S. military projects? Once they're proposed, they refuse to die—they assume a life of their own, and haunt us until someone manages to drive a stake into their hearts... Yet Nabucco's diehard supporters, including the United States, refuse to get over the champagne days of the Baku-Ceyhan oil pipeline and its victory over Moscow."8
It seems that the reference to the Baku-Ceyhan oil pipeline does not belong here: this is the success story of a project that attracted no less ridicule than Nabucco. In Russia it was dismissed as "an international affliction" and a "costly insanity." Skeptics outside Russia indulged in sarcastic comments of the "unspecified amounts of oil will go to the West in exchange for vague political promises" type. The project was branded as a "geopolitical phantom" and a "pipeline leading to nowhere."9 The Baku-Ceyhan pipeline, which bypassed Russia, was realized despite elaborate skepticism: the West scored a geopolitical victory and snubbed Moscow.
It is best not to take media assessments and elaborate journalistic metaphors into account when talking about things that matter, the resource struggle undoubtedly being one of them. The journalist community seems to be guided by political stimuli and geopolitical interests associated with this project. The BTC pipeline has taught us that geopolitical perseverance invariably wins the battle.
The South Stream in a nutshell. It is a joint pipeline project among Russia, Italy, and France which will bring gas across the Black Sea. It will pass along the bottom of the Black Sea from Novorossiysk in Russia to Varna in Bulgaria, where its two branches will cross the Balkans to reach Italy and Austria (their routes have not yet been specified). It is expected to be commissioned in 2015 and to carry 63 bcm of gas a year. As distinct from Nabucco, the South Stream avoided being immersed in historical drama and symbolic expressiveness.
6 Kyle Wingfield of The Wall Street Journal wrote in 2008: "Though EU leaders say it's the Union's highest priority project, Europe's capitals are failing miserably to rally around it" (see: [http://www.gasandoil.com/news/central_asia/ 2840056a2be4b0a763a266492a06092b]).
7 M. Balser, "Die Russen kommen," Sueddeutsche Zeitung, 29 October, 2010, available at [http://www. sueddeutsche.de/wirtschaft/energieversorgung-die-russen-kommen-1.1017335].
8 S. Levine, "Nabucco: The Pipeline That Refuses to Die," Foreign Policy, 30 September, 2010.
9 About these assessments see: Yu. Alexandrov, D. Orlov, "Baku-Tbilisi-Ceyhan: gde neft?" Nezavisimaia gazeta, 4 October, 2002; RusEnergy.com, 25 June, 2002; D. Orlov, "Bolshaia truba dlya dyadi Sema," Nezavisimaia gazeta, 26 December, 2003, p. 10; S. Eduardov, "Zhazhda v trubakh," available at [www.utro.ru/articles/2003/02/07/ 126422.html]; Washington Profile, available at [www.washprofile.org/arch0403/interviews/Kazhegeldin].
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When compared, the pluses and minuses produce a riveting picture. After its first failure at the turn of 2010, Nabucco was revived on 6 September, 2010 when the European Investment Bank, the European Bank for Reconstruction and Development, and the International Finance Corporation (a branch of the WB Group) signed a letter on syndicated funding of the Nabucco consortium; this opened another round of talks about funding. The three financial structures promised to bring in EUR 2 billion, EUR 1.2 billion, and EUR 800 million, respectively. Together with the modest EUR 200 million the European Commission invested in March 2009, the money is expected to attract private investors with the remaining 70 percent of the total. Despite the considerable political support and international funding, the project has not yet achieved the main goal: access to large gas fields. The South Stream is in a similar quandary; despite the Russian leaders' persistent support, it is losing its economic rationale. The section to be laid on the seabed is too expensive, while the repeated attempts to draw a German company into the consortium (RWE and Wintershall are most frequently mentioned) show that the enterprise has not yet taken final shape. Gazprom and ENI, the two main partners, do not see eye to eye on many issues, which does not facilitate progress.
To better understand the chances of both, we analyzed each of the projects in detail.
Nabucco: Minuses
Its viability is doubtful for the obvious reason that the gas fields on which it relies (in Turkmenistan, Iraq, and Azerbaijan) are still undeveloped.
At the turn of 2010, when the project's fiasco was discussed far and wide, Azerbaijan began losing its interest in Nabucco. Early in September 2010, during President Medvedev's visit to Baku, Gazprom and the State Oil Company of the Azerbaijan Republic (SOCAR) signed a contract under which Azerbaijan pledged to double its gas export to Russia to reach 2 bcm in 2011. (In 2010, Russia bought 1 bcm of gas from Azerbaijan; the figure for 2009 being 500 bcm.) It turned out, however, that the September contract remained valid for a year. Despite the strong doubts about the viability of Nabucco, the agreement with Russia does not mean that Azerbaijan has abandoned the European project: it means that Baku is not ready for long-term agreements with Russia. It is prepared to revive its interest in Nabucco and send its oil to the West for better prices and more favorable transportation conditions.
This means that widescale international funding and corporate support cannot compensate for the absence of gas needed to sign the contract.
The latest news, which might pep up Gazprom, came in May 2011 when Executive Director of Nabucco Gas Pipeline International Reinhard Mitschek said that "as soon as there are firm indications that the gas supply commitments are in place" the gas should start flowing through the pipeline in 2017.10 This means that the pipeline will be commissioned three years later than scheduled and that construction will start in 2013 at the earliest.
This is not the whole story: the later start will send up the cost. In May 2011, when speaking at a conference in Stuttgart, European Union Energy Commissioner Günther Oettinger "warns that costs could rise as high as $21.4 billion, up from an earlier estimate at about $11.2 billion."11 This makes the project, which still lacks the necessary volumes of gas, hardly profitable. Turkmenistan's promised reserves have not been confirmed, which makes Shah Deniz-2 of Azerbaijan the only and best hope; its exploitation will start no earlier than 2017.
Shah Deniz-2 in a nutshell: a gas field with 1 trillion cu m of gas operated by a consortium in which BP and Statoil of Norway play the main roles; gas production at Shah Deniz-1 started in 2006
10 [http://www.ocnus.net/artman2/publish/Business_1/A-Step-Toward-Irrelevance_printer.shtml].
11 M.K. Bhadrakumar, "Russia Redrawing Europe Energy Map," Asia Times, 12 May, 2011, available at [http:// www.atimes.com/atimes/Central_Asia/ME12Ag02.html].
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and reached 8.6 bcm a year. The annual yield of the second field, which will be commissioned in 2017, is expected to be 16 bcm.
Nabucco: Pluses
All the minuses notwithstanding, the consortium's executive group managed to brighten the prospects by signing, with great pomp, on 8 June, 2011 in Turkish Kayseri, an agreement between Nabucco Gas Pipeline International GmbH and the corresponding ministries of five transit countries involved in the consortium (Austria, Bulgaria, Hungary, Rumania, and Turkey). According to Reinhard Mitschek, this was needed to create a legal basis for further funding; the bilateral agreements specify the construction standards and government guarantees in about 40 spheres, including acquisition of land, taxes, and import of construction materials. At the ceremony in Turkey, the ministers and the consortium's members did their best to dissipate the mounting pessimism about the pipeline's future fed by their own announcement two weeks earlier that the project would be completed two years later than planned.
The news about a new phase of American-Azerbaijani cooperation in the security sphere made the Nabucco supporters more optimistic: the two countries will protect the energy infrastructure in the Caspian Sea, particularly the planned Trans-Caspian pipeline between Azerbaijan and Turkmenistan, U.S. Ambassador to Azerbaijan Matthew Bryza, one of the architects of George W. Bush's Caspian policy, told journalists on 11 June.12
Trans-Caspian Gas Pipeline in a nutshell: it will be laid on the bed of the Caspian Sea between Tengiz (Kazakhstan)-Turkmenbashi (Turkmenistan)-Baku (Azerbaijan). On the Azeri coast, it will join the Baku-Tbilisi-Erzurum pipeline, one of Nabucco's main stretches. The European Union and the United States are sparing no effort to advance the talks between Baku and Ashghabad.
The vigorous protests of Russia's Ambassador to Azerbaijan Vladimir Dorokhin against the plans to lay pipelines on the sea bottom invited a no less vigorous retort from the American ambassador, who reminded him that Richard Morningstar, Special Envoy of the U.S. Secretary of State for Eurasian Energy, had said earlier that Azerbaijan and Turkmenistan were sovereign states free to decide which pipelines they needed and in which directions.13
On many occasions Russian officials voiced their doubts about the viability of Nabucco because of the absence of the necessary volumes of gas. Recently, it has become much harder, even for the key figures on the Russian energy scene, to voice such doubts publicly. On 20 October, 2010, during President Medvedev's visit to Ashghabad, Russia's Vice Premier Igor Sechin dismissed Nabucco as a project without a future; this produced a sharp rebuff from the Foreign Ministry of Turkmenistan, which accused the Russian official of interference in the energy policy of a sovereign state and of failure to fulfill the RF previous obligations. Dovlet Mommaev, head of Turkmengaz, demanded that Gazprom increase its gas purchases from 10-11 bcm a year to at least 18 billion, as the presidents had agreed.14
The South Stream: Minuses
Russia insists on the South Stream and is prepared to shoulder the huge cost; commission is planned for 2015, however the barriers on the road to the final goal are proving too high. The Kremlin
12
13 By that time, Richard Morningstar had already expressed his country's hopes that Azerbaijan and Turkey would
[http://contact.az/docs/2011/Politics/06116275en.htm].
sign the transit agreement needed to move Nabucco further.
14 [http://www.regnum.ru/news/polit/1414836.html#ixzz1PGCFU4Tt].
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seems to be losing its nerve. A Russian newspaper, Kommersant, quoted Igor Sechin as saying that the South Stream, which was the Kremlin's pet project for a long time, might be pushed aside in favor of a Black Sea liquefied natural gas (LNG) project.
In fact, there has never been much clarity about the South Stream routes; today, in the absence of an agreement with Turkey, which remains elusive despite the long talks and numerous meetings, Russia's South Stream plans look much harder to realize because the pipeline is to be laid in Turkey's territorial waters, which makes it one of the key states. The issue was first discussed in May 2009 in Sochi by Prime Minister Putin and Turkish Prime Minister Recep Erdogan. At that time, Nabucco, which offered much stronger incentives for the development of the country's gas distribution network and energy production, looked more preferable for Turkey.
In May 2011, the Moscow talks with Erdogan brought no results; it was in the wake of the talks that Igor Sechin told Kommersant: "Gazprom and the Russian government are discussing all sorts of options, including building an LNG plant on the Black Sea either as a supplement or an alternative to the South Stream." This came after the fairly unexpected statement Vladimir Putin offered after active negotiations in Brussels on long-term relations in the energy sphere between Russia and the European Union to the effect that Russia would look at the possibility of building an LNG plant on its Black Sea shores.15
Turkmenistan Holds the Keys to Nabucco
The repeatedly postponed final decision on Nabucco did not remove Turkmenistan from the agenda. In recent years this country has gained a lot of political weight in the Caspian to become the key of European energy policy. The Europeans still consider the republic's gas riches as the main reserves for their new gas pipeline16; the future of Nabucco hinges on what Ashghabad plans to do. On 25 May, 2011, when a large Russian delegation headed by Minister of Energy Sergey Shmatko arrived in Brussels to discuss the future relations in the gas sphere between Russia and the EU, European Union Energy Commissioner Günther Oettinger said that Europe's energy future was geared, first, to gas and, second, to Central Asia.17
Azerbaijan will launch Nabucco by sending the first volumes of natural gas along it; the future of the pipeline and its chance of reaching the planned capacity are in the hands of Ashghabad. Turkmenistan, which wants diversification of export routes, has not joined Nabucco; it prefers to sell gas on the country's border, which means that the corresponding Nabucco structures will be responsible for transportation across a sea torn apart by political and territorial disagreements. The Trans-Caspian project is still alive even though Turkmenistan sells its gas to China, Russia, and Iran. To be realized, Nabucco needed Turkmen gas, while Turkmenistan needed a jolt into action. This happened when it detached its energy policy from Russia and turned to China (to which Russia never objected)18 and also to Europe.
Turkmenistan not only wants to sell its gas to Europe, it is moving in this direction. On the other hand, relations with Russia deteriorated when it refused to buy Turkmen gas between April and December 2009. Deprived of its usual inflows of gas money, Ashghabad began feverishly looking for new routes, the trans-Caspian being one of the options. Emboldened, in November 2010 at the Oil and Gas of Turkmenistan—2010 conference, Ashghabad went even further. Vice Premier of the Government of Turkmenistan Baymurad Hojamuhammedov announced that in five years' time his country
15 [http://www.kommersant.ru/daily/61075].
16 See: S.S. Zhiltsov, "Turkmenistan obostryaet igru. Ashkhabad prevrashchaetsia v kliuchevuiu figuru v evro-proektakh," Nezavisimaia gazeta, 31 May, 2011, available at [http://www.ng.ru/energy/2011-05-31/13_turkmenistan. html?mpril].
17 See: "Günther Oettinger—o neizbezhnosti proekta Nabucco," Kommersant, 26 May, 2011.
18 See: A.K. Magomedov, R.N. Nikerov, Bolshoy Kaspiy, pp. 208-211.
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would supply Europe with up to 40 bcm of gas every year. Ten billion cu m, the Turkmen official specified, would come from the off-shore fields in the country's west (in 2011 the Malaysian Petronas company would extract 5 bcm of free gas) and 30 bcm of gas from the rich fields in the country's east. Turkmenistan is building, and plans to complete by 2015, an East-West gas pipeline in its own territory with an annual capacity of 30 bcm to move gas from the gas-rich inner regions to the Caspian shores. The figures might be inflated (this often happens with the Caspian CIS countries), however Ashghabad clearly intends to start the trans-Caspian route along with Baku.
The country is not discouraged by the fact that the pipeline can cross the sea only after the legal status of the Caspian Sea has been determined and if all the coastal states agree. Turkmenistan has already stated that the agreement of the sides through the sectors of which the pipeline will be laid will suffice, that is, any two of the five coastal states may lay pipelines in their sectors without seeking the consent of the others. President of Turkmenistan Berdymukhammedov said this on 18 November, 2010 in Baku on the first day of the summit of the Caspian states. The pipeline in the national sectors of Turkmenistan and Azerbaijan was a domestic issue of the two countries rather than a common problem of the five states. This means that skeptical remarks and irony should be forgotten; Turkmenistan has accomplished a breakthrough to the West.
Azerbaijan, which is on Nabucco's side, is quite satisfied; it is prepared to deliver its energy resources to Europe and offer supply lines for Turkmen gas.
The future of the southern energy corridor, which will bring Azeri and Turkmen gas and oil to Europe, bypassing Russia, is growing clearer along with its strategic dimension. Today, it is used by Azerbaijan for its energy resources and by Kazakhstan and Turkmenistan for their oil. According to the State Statistical Committee of Azerbaijan, by 1 November, 2010, the BTC pipeline had moved 860.4 thousand tons of Turkmen oil under the contract signed in July 2010.19
Today, Russian politicians and top managers are no longer sarcastic; no matter what Putin, Sechin, and Miller (and their subordinates) have to say about the absence of guaranteed fuel sources, they understand that Nabucco is moving toward its realization. Yuri Shafranik, a man of immense practical experience and a veteran of Russia's oil and gas branch, has warned against treating Nabucco lightly: today South Stream has resources while Nabucco has not. Tomorrow new contracts may be signed to fill the pipeline bypassing Russia.20
C o n c l u s i o n
The above refutes what looks like the premature conclusion offered by well-known Russian expert on the Caspian problem Prof. Zhiltsov. He writes that by 2011 the period of new pipeline projects in the Black Sea-Caspian region was completed because, he argues for not entirely clear reasons, "the regional countries will be confronted with the much more difficult task of finding hydrocarbon resources and tracing the final routes of the new pipelines."21
Today we are watching an intensive phase of one of the acutest geopolitical confrontations in the Caspian-Caucasian region: Nabucco of the European Union and South Stream of Russia. The present round is unfolding amid the skyrocketing demand for natural gas exacerbated by the techno-genic disasters in Japan and the decision to abandon nuclear power production in Europe, particularly in Germany. The rivalry between the two pipelines is developing according to the "zero sum game" scenario, where the defeat of one means the victory of the other. The conflict is a product of mutual dependence and the depleting raw material resources.
19 See: S. Mamedov, "Ashkhabad i Baku gotoviatsia k Nabucco," Nezavisimaia gazeta, 24 November, 2010.
20 See: V. Panfilova, "Ideia stuchitsia, a truba zovet," Nezavisimaia gazeta, 30 November, 2010.
21 S.S. Zhiltsov, "Epokha geopoliticheskikh truboprovodov. Kaspiyskie transportnye proekty otorvany ot dobychi syria," available at [http://www.ng.ru/energy/2011-04-13/13_truboprovod.html7mpril].
The recent trends—Moscow's shrinking influence on Ashghabad, the attempts to isolate Iran, and the gradually warming relations between Turkmenistan and Azerbaijan—promise shifts in the Caspian. In the past, Russia paved the way toward bilateral agreements by signing a contract early in the 2000s on border delimitation with Kazakhstan and Azerbaijan. This means that, all going well, a bilateral agreement between Baku and Ashghabad on the sea border and a Trans-Caspian gas pipeline cannot be excluded. This deal might invite the interference of extra-Caspian forces, the West and NATO in particular, which cannot but cause a lot of concern in Moscow and Tehran.
