Diplomat hits out at Russian energy policies

Russian energy policy is based on "dominance-seeking strategies" and Turkey should realize that the South Stream project might threaten its political and economic independence, according to Sergiy Korsunsky, Ukraine’s ambassador to Ankara.

“The diversification of routes is important, but much more important is the diversification of suppliers,” Korsunsky told the Hürriyet Daily News & Economic Review in an interview.

In an effort to secure its position as a regional energy hub, Turkey is engaged in talks with Azerbaijan, Iran, Iraq and Turkmenistan to transport their reserves to European markets. Backed by both the European Union and the United States, the Nabucco is regarded as a promising project to realize Turkish dreams.

However, some are wondering if Turkey is endangering its own energy security by allowing Russia to construct the South Stream pipeline through its territory.

“If the South Stream is built, I very much doubt that Nabucco will be built,” Korsunsky said. Noting that the global financial crisis is not over and that the South Stream requires 25 billion euros in credit, he said. “No one will invest in Nabucco if the South Stream is in place.”

NATO has realized that gas cuts may harm economic and military infrastructure and has begun developing new strategies focused on energy security, Korsunsky said. 

“Every country must think about energy balance. The question is how much you depend on one supplier,” he said. The U.S. legislation prevents any supplier from providing more than 25 percent of its energy needs, the ambassador said.

“As far as I know, Turkey is more than 70 percent dependent on Russian oil and gas,” he said, warning that the South Stream would only increase this dependency. “You will depend almost 90 percent on Russian supplies.”

Ukraine seeks stake in Nabucco

Ukraine is looking forward to hosting Turkish Energy Minister Taner Yıldız to discuss business opportunities related to pipelines, gas storage facilities and nuclear power plants.

Ambassador Korsunsky also said his country has been seeking joint energy projects with Turkey since 2006.

“We would like to participate in oil and gas pipeline construction projects such as Nabucco and Samsun-Ceyhan,” Korsunsky said. “Once Nabucco is in the active stage, we will participate in tenders to supply pipes and compression stations.”

Ukraine probably has the biggest natural gas storage in the world, with storage for up to 32 billion cubic meters, the ambassador said. Keen to construct gas storage facilities in Turkey, he said: “We know this better than anybody else. If there is a tender, I will strongly recommend that our companies participate.”

Russian-made nuclear power plant

According to Korsunsky, Ukrainian President Victor Yushchenko had told Turkish Prime Minister Recep Tayyip Erdoğan that Ukraine was seeking to sell equipment for nuclear power plant construction in Turkey.

“We cannot construct the whole reactor but we can produce additional equipment,” he said. Claiming that Ukraine is the most experienced in Europe on nuclear energy security, he said: “What would you do with spent fuel? After some period of operation, you have to remove fuel and put it somewhere. It is a serious problem because you must have safe storage. That’s what we know very well because of Chernobyl.”

Once it is clear which companies will build the nuclear plant in Turkey, the winner is expected to announce a second tender to buy parts needed for construction. Russia and Ukraine, as two ex-Soviet republics, will probably work together.

“Ukranian companies know Russian reactors and the Russian nuclear industry better than anybody else. Almost every Russian nuclear reactor has Ukrainian parts,” Korsunsky said. 

Cat-and-mouse game

However, Korsunsky blamed Russia for staging a “cat-and-mouse game” and threatening to cut off gas to Europe based on "false non-payment claims."

“This is a political issue. Gazprom’s final goal is to get control of the gas transportation system of Ukraine,” he said. “We transit 80 percent of Gazprom exports to Europe and it wants to control all pipelines outside Russia. These gas cuts have never been our fault.”

The Ukraine route is capable of transporting up to 170 billion cubic meters annually, but this year only 90 billion cubic meters were transmitted because of the global crisis.

Ukraine feels comfortable with the Turkish role in Nabucco but the picture changes when it comes to the South Stream pipeline.

“South Stream is a different matter. Its two goals are to bypass Ukraine and to kill Nabucco.”

Hopeful that Turkey may change its stance towards South Stream, he said: “The permission has been granted for a feasibility study. Once it is done, the Turkish government must look at this study and think again whether it is worth spending so much money and harming relations with other countries.”

“You can sign many different agreements. Years ago, agreements were signed between Russia, Bulgaria and Greece to construct the Burgaz-Alexandroupolis pipeline to ease traffic through the Bosphorus. Agreements for the North Stream were signed four years ago. Construction has not started yet. One shouldn’t judge if the agreement is signed or not. When you get to the details, many questions will arise.”

The ambassador also claimed that Russia is seeking to overtake local gas distribution in Turkey.