The Bloody Gas

Since March 15^th, more than 6,200 people including hundreds of children have died. About 69,000 detained with signs of torture and more than 19,000 Syrians have fled to Turkey; More than 7,600 of them live in Turkish government-sponsored camps since the brutal crackdown on an anti-government revolt.

The criminal Bashar and his Shabeha “Thugs” are continuing the genocide against civilians by using live bullets and heavy guns from land and sea while the world is watching! The criminal brutal Syrian regime is not killing the civilian protesters alone but Iran and Hezbollah are participating direclt by soldiers and weapons sales while Russia and China are participating indirectly by their vietos in UN Security Council against a real resolution to secure civilians. Also, the International Community is sharing part of the Syrian innocent blood of martyrs.

The criminal Syrian regime is also backed and supported by Hezbollah in Bahrain (Alwefaq), Shias in Iraq and all followers and believers of Wilayat Alfaqih “The Supreme Leader” Khomeini.    

On October 4^th, Russia and China blocked efforts of other major powers to pass a U.N. Security Council resolution on Syria, with a dramatic dual veto thwarting a call for an immediate halt to the crackdown in Syria against opponents of President Bashar al-Assad. Nine of the 15-member council countries, including the United States, voted in favor of adopting the resolution. CNN reported

For Russia and China, threatening sanctions is too confrontational. Russian Ambassador to the UN, Vitaly Churkin said: “We believe it unacceptable the threat of sanctions against the Syrian authorities. It’s against the principle of a peaceful settlement on the basis of a full Syrian national dialogue.” Euronews reported

The vote triggered an angry reaction from Susan E. Rice, the U.S. ambassador to the United Nations, who walked out of the Security Council meeting in protest during the Syrian envoy’s statement, in which he accused the United States of being a “party to genocide” through its support of Israel on the council. The British envoy, Mark Lyall Grant, walked out some time after Rice.

“The United States is outraged that this council has utterly failed to address an urgent moral challenge and a growing threat to regional peace and security,” Rice said, with unusual emotion. “Several members have sought for weeks to weaken and strip bare any text that would have defended the lives of innocent civilians from Assad’s brutality.” The Washington Post reported

The conflict between the United States and Russia is not only political or for the sake of civilians being killed daily in Syria or Libya before. It’s the conflict on resources and gas specifically for the coming 20 years at least.

To understand the international delayed military action to save civilians in Syria, I will put the spotlight on the GEOPOLITICAL conflict between the US, EU, and Russia on gas pipelines!

Russia under Putin is attempting to rediscover its former status as a great power equal in status to the US and now also China. At the same time, Putin is pursuing a second goal: the integration of Russia into the global economy. Moscow believes the rising geopolitical and economic importance of oil and gas can reverse Russia’s old dependency on the West.

Russia is the world´s largest exporter of gas (share of almost 20% in global gas exports) for four reasons. First, the country has the world’s largest proven gas reserves, equal to nearly one-quarter of global reserves. Second, Russia has the world’s highest gas production, accounting for one-fifth of global production. Third, domestic demand leaves room for gas exports, with Russia’s home market absorbing around 70% of the national gas production. Fourth, Russia’s pipeline network enables it to re-export imported gas from Central Asia.

                                                                                                      

The implementation of Russia’s gas strategy in the EU is largely the responsibility of Gazprom, the country’s major gas company. The state acquired a controlling 51% stake in Gazprom in 2000 and installed a new board comprising allies of Putin in 2001. On its home market, Gazprom dominates gas exploitation and sales, while it manages the gas transmission networks

Gazprom concluded contracts with a duration of up to 30 years with major EU gas companies in 2006. The company prefers long-term contracts as they provide security of demand. 

Russia has two gas projects:

First: The Nord Stream pipeline

The Nord Stream project fits neatly within Russia’s strategy to consolidate its position in the EU. In 2005, Gazprom signed an ‘in-principle’ agreement to develop the Nord Stream pipeline. The other signatories were the two German companies Wintershall and EON Ruhrgas, later joined by the Dutch gas company Gasunie.

The Nord Stream twin pipeline system through the Baltic Sea runs from Vyborg, Russia to Lubmin near Greifswald, Germany. The pipelines are built and operated by Nord Stream AG.

The Nord Stream route crosses the Exclusive Economic Zones of Russia, Finland, Sweden, Denmark and Germany, as well as the territorial waters of Russia, Denmark, and Germany.

The two 1,224-kilometre offshore pipelines are the most direct connection between the vast gas reserves in Russia and energy markets in the European Union. When fully operational in the last quarter of 2012, the twin pipelines will have the capacity to transport a combined total of 55 billion cubic metres (bcm) of gas a year to businesses and households in the EU for at least 50 years. As the project strengthens the EU energy market and reinforces security of supply, the project has been designated as being of "European interest" by the European Parliament and Council.

Construction of Line 1 of the twin pipeline system began in April 2010, and was completed in June 2011. Transportation of gas through Line 1 began in mid-November 2011. Construction of Line 2, which runs parallel to Line 1, began in May 2011. The second line is planned to come on stream in the last quarter of 2012. Each line has a transport capacity of roughly 27.5 bcm of natural gas per annum.

From a political point view, the Nord Stream gas pipeline would make gas flows a more effective tool for Russia to influence the political process in EU countries in Eastern Europe.

Second: The South Stream pipeline

The South Stream project is aimed at strengthening the European energy security. It is another real step toward executing the Gazprom strategy to diversify the Russian natural gas supply routes.

The project provides for the offshore South Stream pipeline to run under the Black Sea from the Russkaya compressor station on the Russian coast to the Bulgarian coast.

The project began in November 2006 when Gazprom and Eni entered into the Strategic Partnership Agreement providing Gazprom with the opportunity to directly supply Russian gas to the Italian market starting from 2007. Under the Agreement the existing contracts for Russian gas supplies to Italy were extended till 2035.

On January 18, 2008 a special purpose entity, South Stream AG, was incorporated in Switzerland by Gazprom and Eni on a parity basis to build the offshore pipeline section.

During 2008–2010 intergovernmental agreements on the project implementation were signed with Austria, Bulgaria, Croatia, Greece, Hungary, Serbia and Slovenia.

Gazprom has signed bilateral agreements on cooperation in the field of project implementation with the authorized national companies: Serbian state-owned company Srbijagas, Hungarian Development Bank (MFB), Bulgarian Energy Holding EAD, Greek gas transmission system operator DESFA, Austrian OMV.

On June 19, 2010 Gazprom, Eni and French energy company EDF entered into a trilateral memorandum for EDF to join South Stream AG as a new shareholder by the end of 2010 through a reduction of Eni’s share in the joint project company. Meanwhile, the share of EDF will be not less than 10 per cent.

On October 1, 2010 Marcel Kramer was appointed Chairman of the Board and CEO of South Stream AG.

A brief analysis of both pipeline projects makes clear that Russia likely has political and strategic reasons for building the new pipelines.

Many analysts, claim that South Stream is a deliberate attempt of Russia to prevent the building of the Nabucco pipeline. The South Stream project seems poised to have a negative impact on the Nabucco project as it aggravates the latter’s most serious problem: the supply of sufficient gas to transport through the pipeline.

The Nabucco pipleline is the American gas project to save the remaining available share of gas in the global market before full Russian – Iranian control!

Russia, Iran and Qatar together already hold 56% of world’s reserves (according to BP estimates); with Venezuela, Algeria and Libya joining the group would have about 2/3 of world reserves in their control.

The Nabucco project:

Nabucco is the new gas bridge from Asia to Europe and the flagship project in the Southern Corridor. It will be a pipeline to connect the world’s richest gas regions - the Caspian region and Middle East - to the European consumer markets.

There are six Nabucco shareholders: Bulgarian Energy Holding (Bulgaria), Botas (Turkey), MOL (Hungary), OMV (Austria), RWE (Germany), Transgaz (Romania)

The pipeline will link the Eastern border of Turkey, to Baumgarten in Austria - one of the most important gas turntables in Central Europe - via Bulgaria, Romania and Hungary.

The construction of the pipeline is supported by the 2009 Intergovernmental Agreement signed in Ankara in July 2009, which harmonises the legal framework and grants stable and equal transport conditions for all partners and customers.

The main pipeline will be built in one phase. Construction will start in 2013, first gas will flow in 2017.

The long-term prospects of the Nabucco project, and thus of the EU’s ambition to become less dependent on Russia for its gas imports, were further clouded by Gazprom’s acquisition in 2008 of a 50% share in the large gas transmission centre at Baumgarten in Austria.

the construction of Nabucco would decrease—in some cases dramatically— the level of dependence on Russian exports. While the overall upside potential of Nabucco is only 31 bcm per year—a relatively small  amount in a pan-European context—it would be hugely important to countries such as Bulgaria, Austria, and Romania, which could see their reliance on Russian supplies cut in half. 

Moreover, shipping gas via Nabucco could be 30-40% cheaper than shipping it via South Stream. This would mean Nabucco will have a downward influence on the price relative to what it would be if only South Stream (and in general Russian) gas would be available in Europe. In other words, with Nabucco, Gazprom will be forced to sell its gas at Nabucco’s price. This would be clearly beneficial to European consumers, while also denying Gazprom huge profit margins. In addition, the cheaper transport provided by Nabucco would make it more lucrative for suppliers  such as Azerbaijan and Turkmenistan to contribute available volumes. 

If Nabucco is in fact a ‘priority project’, and if diversification is indeed Europe’s goal, then South Stream makes no sense. It is a threat to both the European Union as a whole and to the European countries involved in the project. Failure to construct Nabucco would create the perception that the EU cannot succeed in its goals even on its own territory. Countries such as Russia and Iran will conclude that the EU has no solidarity; that it can be divided and conquered. Perhaps most importantly, the realisation of South Stream would perpetuate and expand Russia’s political and economic influence in Europe.

The Iranian Gas:

According to Iran Petroleum Ministry, Iran's proved natural gas reserves are about 1,045.7 trillion cubic feet (29.61 trillion cubic metres) or about 15.8% of world's total reserves, of which 33% are as associated gas and 67% is in non-associated gas fields. It has the world's second largest reserves after Russia.

On July 25^th,  Iran had signed a preliminary $10 billion deal with Syria and Iraq to export its natural gas under the memorandum of understanding signed Monday by the three countries' oil ministers, a 5,000 kilometre (3,100 mile) pipeline will be built to carry gas from the giant South Pars field.

The gas would be moved through Iraq, Syria, Lebanon and the Mediterranean, with Europe planned as the final export destination. Deputy Oil Minister Javad Owji says the field has enough reserves to feed exports for the next 80 years, at a rate of 250 million cubic meters per day. The project is slated to take three to five years.

The deal would also supply gas to Syria, which lacks the kind of oil and gas resources of Iran and Iraq two key OPEC members.

The comprehensive energy partnership agreement Gazprom and the Iranian state company NIOC reached on July 13 is quite significant, given that Russia is supposed to be working with the US and the EU to ensure that Iran has no room to maneuver on its ambition to develop nuclear weapons. While Western firms, most recently Total, are being pressured by their governments to leave Iran and its lucrative South Pars field, Russia’s Gazprom may be positioning itself for a long-term strategic partnership with Iran. In addition to assisting Iran with its much-needed energy infrastructure development, Gazprom also seems interested in a possible gas swap deal under which Iran would receive gas from Gazprom in return for exporting the same amount of gas to Russian customers from the Persian Gulf. The Russo-Iranian MoU additionally suggests that NIOC and Gazprom would establish a joint company, which would undertake projects not only in Iran and Russia, but in third countries, including South American and Asian states.