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What does the signature of the Nabucco Project mean?
First signatures for Nabucco Project were put down in Ankara. Representatives of the European Union (EU), Austria, Turkey, Bulgaria, Romania and Hungary came together in the ceremony in Ankara. Nabucco seems as an interesting project. And it is a definitely good thing that Turkey is associated with it. So, how can these developments be assessed? At the first glance, it is possible to think "there is no commodity to transport and no plan on how to finance the pipeline to carry the commodity" and say "we need the horse and three horseshoes to go". However, you must note that the signing of this agreement will facilitate the search for the horse and horseshoes. Is this agreement enough alone? If you say 'why not', please go on reading.
First, let us start with what Nabucco is. Nabucco is a project to diversify Europe's natural gas dependency. It is planned to transport Caspian and Iranian gas to Europe through Turkey building a 3300 km pipeline as an alternative to Russian monopoly. It is estimated that with the project, 31 billion cubic meters natural gas will be carried by 2020. But it is necessary to not overlook the real rationale: European countries are trying to limit the ordering initiatives Russia used to make such as "I am irritated by you today. I will not give any gas".
Now, let us evaluate the developments and locate the agreement signed within a framework. A few days ago a friend said: Pipeline investment is a huge one. In case of such an investment, two points gain importance: Strong demand and a reserve to meet the demand. After that point, the only task is to install a line between these two. If there is no problem regarding the saleability of the commodity to be carried, it becomes easier to solve the rest of the problems. Nabucco project must also be evaluated within this framework. The representatives that came together in Ankara confirm one thing; let us underline it: EU countries seek a line that will be an alternative to the natural gas supplied through Russia. It is obvious that there exists a political choice. So, it appears there is a consensus on the saleability of the commodity; i.e. there exists a market. This is the first point.
But, what lies underneath the political choice resulting in the emergence of this market? I believe the problem of Russia's being unpredictable. Thus, when such line is constructed, there will be a demand for transmitting natural gas through it to Europe solely due to political reasons. And this is exactly what the agreement confirms and what is extremely important. This is the second point.
The third point to be reached is closely connected with the previous one. That people take a bright view about a route passing through Turkey alternative and parallel to a route passing through Russia also means that Turkey appears as a partner predictable over the medium term. It is understood that the balance of predictability of Turkey which was disturbed by the senseless threat Honorable Prime Minister voiced in Brussels reading "If you put Turkey off, we play hard in Nabucco project" is skillfully reconstructed. And this should be recorded as a score point for Turkey. It is necessary to underline that the process leading to the agreement signed in Ankara was not pursued easily. It is necessary to remind that to successfully accomplish the project in the process ahead that Honorable Prime Minister Erdogan must leave behind his tendency to become Putin-like toward Europe in the subject of energy.
And the third point: When looked within the framework drawn above, if there exists strong demand in any motivation, solution of two problems seems to be easier. First is the provision of the commodity to be carried by the new line: If you point at a already existing market, who can abstain from selling what he holds? The list of sellers "including Russia" must better be considered in this respect. What matters is to provide a route which will tie the supply from different resourced to demand. And I guess the trick is to continue the project after the initial agreement. And the second problem is obviously financing the pipeline. What is the issue here? If you put on the table the already existing supply on the one hand and demand on the other, does not the solution of financing issue become a detail? Yes, it does.
So, under these circumstances, how must we conclude? The framework agreement put forth in Ankara is an important step achieved. Turkey, thanks to its geographical location, holds an important position in energy security discussion. In the medium term, there is no problem to be encountered in the future for Turkey. What is the problem? It is of importance to cross the weak and shallow stream without getting drowned before sailing in the deep ocean on which we will have a highly successful cruise. A country without an economic policy cannot have foreign policy. A country without an economic policy cannot properly set her priorities in any project or make calculations. A country that cannot make her own calculations as she does not have an economic program cannot go beyond subcontracting the calculations of others. This seems to be the current position of Turkey in the Nabucco project.
It is wise for those who cannot predict their future not to take random steps.
This commentary was published in Referans daily on 14.07.2009