U.S. says Caspian pipeline deal "not good" for Europe
PARIS (Reuters) - U.S. Energy Secretary Sam Bodman said on Monday an agreement to build a new Caspian pipeline to carry Central Asian gas via Russia would not be good for Europe.
Russia, Kazakhstan and Turkmenistan agreed on May 12 to build the natural gas pipeline around the Caspian Sea, a move that bolsters Russia's dominance over the region's gas exports.
"That would not be good for Europe," Bodman said. "It would fly in the face of what is needed, which is the diversity of suppliers," he said at a news conference in Paris, adding that Europeans should adjust their response accordingly.
The new pipeline and an accompanying deal to upgrade existing Soviet-era infrastructure are a setback to U.S., European and Chinese hopes of raising the flow of Central Asian gas out of Russian hands.
The West has expressed fears that Russia is using its vast energy and other natural resources to assert its influence across the continent, an accusation the Kremlin rejects.
The pipeline deal potentially strengthens Russia's hand at a time when it has mounting disagreements with the European Union over a range of issues, chiefly involving new EU members who were once in the Soviet orbit.
CRISIS TALKS
Germany's foreign minister Frank-Walter Steinmeier, whose country holds the rotating EU presidency, was due to visit Moscow on Tuesday for crisis talks to try to rescue an EU summit with Russia planned for Friday in the southern Russia town of Samara.
Moscow has refused to lift a ban on Polish meat imports, citing cases of fraud, which has prompted Warsaw to veto the opening of talks on a new pact covering energy, trade, human rights and foreign policy.
Saturday's pipeline agreement was reached at a summit of the three states in the Turkmen Caspian port of Turkmenbashi.
In its first stage, the pipeline will deliver 10 billion cubic meters (bcm) of gas per year by 2009-2010, Russian Energy Minister Viktor Khristenko said. Including the infrastructure upgrade, deliveries to the Russian border will rise to 90 bcm.
While Turkmen President Kurbanguly Berdymukhamedov said plans for a rival U.S.-backed trans-Caspian pipeline that bypasses Russia had "not been completely dropped", Khristenko said he believed there was now little chance of it going ahead.
"Technological, legal and ecological risks are so big that it will be impossible to find an investor unless it is a political investor who does not care how much gas there is to pump through," he said.
Berdymukhamedov said Turkmenistan still had a long-term interest in diversifying pipelines and listed possible projects with Iran, China, Afghanistan, India, and the trans-Caspian.
Western concerns over energy were heightened early last year when Moscow interrupted flows of gas to Ukraine in a dispute over prices, causing falls in onward supply to Europe, which gets a quarter of its gas from Russia.
Early this year a dispute with transit country Belarus briefly halted pipeline flows of Russian oil to European refineries.
