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WAR IN SYRIA CHANGES REGIONAL GAS BALANCE

from Natural Gas Europe:

Russia takes advantage

The involvement of Russia in the Syrian war is a development of macro-historical proportions. It is the first time in history that Russia intervenes directly, and with formidable military force, in the Middle East, within a stone’s throw from the Saudi Peninsula where immense hydrocarbon reserves are securing the world’s energy. Even during the height of the might of the former USSR in the wars back in 1967 and 1973, Moscow was adamant about not investing military and was cautiously supporting either Egypt or Syria via aid and training. Apart from the wider geopolitical change of balances that are observed, there are consequent micro-trends that directly affect the natural gas sector in the region.

First of all, Azerbaijan, through its Azerbaijan Methanol Company, signed a 5 year contract to secure gas imports from Gazprom for around 2 bcm annually. Although imports were being conducted between 2009-2013 never exceeded 1 bcm per year. In fact, Baku seemed hesitant in enlarging this cooperation. Nevertheless it seems that Azerbaijan is getting closer to Moscow in gas terms, since the impeding opening up of the Iranian market after the lifting of international sanctions will witness a wider alliance between two gas giants, Russia and Iran, who together control around 45% of the global natural gas reserves and 25% of yearly global production. Baku is also continuously pressurized by its hostile relations with Armenia, whilst the local administration over the past 12 month is gradually cracking down opposition groups or liberal teams of people that are linked with NGO’s financed mainly by US and EU political and business circles. Thus, we should witness a greater alliance between the Azeris and a Gazprom unravelling in the coming period based on the above realities.

Meanwhile, the Deputy Prime Minister and Minister o Energy of Georgia, Kakha Kaladze, relayed to the local press recently that Russian gas is a preferred choice and better priced than Azeri imports for the Georgian market. Already he stated that talks have been held with Gazprom’s chief Alexei Miller on the issue and that Georgia is also interested in securing imports from Iran in the future. Like Azerbaijan, Georgia is facing geopolitical realities based on the dynamics of the re-emergence of the Russian role in the region and that of Iran and the destabilization of Turkey. Thus it stands to be cornered and an upturn of Tbilisi’s stance towards forging stronger ties in gas business with Moscow is emerging.

Read More @ NaturalGasEurope.com

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