Energy Union, Competing Regional Energy Priorities Converging Needs: What Future for the European Energy Security Strategy?
Panelists:
Maroš Šefčovič, Vice President for the Energy Union, European Commission
Mihnea Constantinescu, Ambassador at Large for Energy Security, Romanian Government
Yiorgos Tsipras, Secretary General for International Economic Relations, Ministry of Foreign Affairs of the Hellenic Republic
Edward Chow, Senior Fellow, Energy and National Security Program, CSIS
Mehmet Öğütçü, Chairman, Global Resources Partnership, Special Envoy for the Energy Charter, The Bosphorus Energy Club
Danila Bochkarev, Senior Fellow, Regional Security Initiative, EastWest Institute
Moderator: Alexandra Gătej, CEO, Maldon & Wat
Energy security, governance and overall sustainability issues remain at the top of the European and global agenda. An integrated European energy market would also contribute significantly to Europe’s energy security, by mitigating risks of supply disruptions such as those faced by some of the member states. Completing the Energy Union project does not require only political will and proper policy instruments to liberalize domestic energy markets across the EU but also the financial and technological means needed to set up the infrastructure connecting energy providers with the rest of the continent. In order to achieve this, governments, private investors and the industry need to strike the balance between energy security, affordable pricing and environmental safety. At the same time, dropping oil prices impact negatively the security of EU energy supplies, since most of the European oil and gas production is offshore and growing rather expensive, while for many member states the Russian gas remains essential.
On the other hand, lower fossil fuel prices are likely to undermine further investments in European offshore production, especially in medium and long term, while dropping gas prices would facilitate Russia’s Gazprom regaining market share against LNG and alternative energy sources. Though the downturn in crude oil prices will not last forever, developments triggered by it are likely to test the stability and resilience of energy systems across industry- dependent Europe and the rest of the world. At the same time, falling oil prices and subsequent impact on gas markets can act as an additional deterrent for major companies to undertake new projects in the Eastern Mediterranean and Black sea area, putting pressure on Europe’s energy dependent south and east. While the Eastern Mediterranean seems to hold perspectives for new gas discoveries and help ease the pressure of finding alternative energy resources for the European market, the region currently faces challenges of all types.
Bucharest Forum is the public events platform of Aspen Institute Romania. Its creation was inspired by an Aspen Institutes Network of International Partners international committee gathering in 2009. Since its inception in 2012, the mission of the Bucharest Forum is to create a regional platform for forward thinking on economic and security policies and for promoting political dialogue between governments and business.
Bucharest Forum 2015 takes place between 14-16 October at critical times for the region and Europe. As the global order is changing, new economic and strategic alignments shape the context for political cooperation, economic and trade relations as well as investment. This is particularly evident in the East-West political and economic dynamic along the New Silk Road.
Political crisis in Europe is evident in the difficulty of managing the Greek debt issue, the UK referendum and the Mediterranean refugee crisis. This European malaise is heightened by domestic populists’ rifts and the challenge of the deep low in relations with Russia over the Ukraine crisis. Combined with a deep partisan rift in Washington and approaching Presidential elections in the US this has implications for the West and presents complex challenges for the Trans-Atlantic community.
We have heard from commissioners have to reach the underlying job political economic and legal aspects that impact the supply of energy into Europe and what you is doing to address these challenges under the strategy of energy Union before we open the panel i would like to share the ground rules of this
Little piece of workshop as mr Turner was already mentioning I would like to open the floor to a couple of questions directed to Commissioner safety of each and then we will continue the panel with maximum five minutes interventions from each of the panelists followed by discussion on what people say and then
Followed by another openings the session for the room to for the audience to ask questions so without further ado questions for commissioners have George a couple of them maximum three the interconnection between Romania and Bulgaria has become a local joke here what if additional delays will put in
Danger the cooperation and the project the second could and under what conditions the pipe between whom gain and keisha now be eligible for the year financing as a part of the energy union and certainly what about you crime having in mind that the energy union is not only about supply but equally about
Security as part of the security of the European Union how to protect and to save her the situation of Ukraine knowing that the Red Army was always replaced by custom in recent years and Ukraine may face isolation with the project nordstrom to thank you very much thank you very much for the great
Cooperation and all the energy security files in the European Parliament and answering the concrete questions interconnectors Bulgaria Romania and of course romania moldava are very important for the regional energy security but I would also say for the energy Union as such because I mentioned it several times and
I think that this is common understanding which goes across the whole European Commission and I also believe across the European Parliament and the council that energy Union doesn’t stop at European Union’s border because it’s quite clear that our energy networks our energy cooperation is very much intertwined with our neighbors bit
In Western Balkans with beat in a Moldova bit in Ukraine orbit in Mediterranean Basin it’s very clear that in a field like energy and energy training clearly need to cooperate very closely with our partners and I have to say that after this morning meetings with the Prime Minister Ponte is Andre
The minister of energy I think that we progress very well in our discussions concerning on the on the both projects so Bulgaria and Romania we concluded the ideal situation would be to complete it next year and on the Moldova and Romania I’m very glad to say that on Monday I a
Very fruitful meeting with the Prime Minister’s stralis who came to russell’s to join as 16 16th country our classic cooperation he signed the joint declaration and of course this interconnector and the prolongation of the connector from the border to the to the kitchener was actually the major
Topic we discussed so I think that we have good ingredients we have to overcome the usual issues linked to be the permitting with the public procurement with the financing but i think we are working on all of them in a way that these interconnectors would be
Billed as soon as possible and i’m sure to the benefit of the region and both countries concerning the Ukraine here I think it’s a quite clear position of the European Union which was not expressed only by myself or the representatives of the Commission but we have unanimous agreement on the conclusions of the
Foreign ministers from july of this year thats clearly stated that preservation of the transit gas corridor through Ukraine is of very high importance to the energy security of the European Union and therefore i’m quite encouraged when i read i think this week the latest statement of the president putin that
They are going to support the continuation of ukrainian transit i think it’s very important for ukraine it’s very important for the possibility not only to transit the gas but also to benefit profit from the reverse flows from the from the western europe it’s very important for the revenue of
Ukrainian budget and it’s very important for the overall energy security of european union because of the strategy importance of the ukrainian gas storage which are among the biggest in in europe so that’s one of our priorities and I think we have to work together with our Ukrainians partners on on the energy
Reforms on the restructuring of the of the traditional companies of the Ukraine or the proper implementation of the third package which was introduced by this new gas law in Ukraine which is entered into force as a first of October and of course to help them to overcome
The coming winter which I think we managed to do through the approval of the trilateral gasps biting protocol between Russia Ukraine and the European Commission which creates goodbye conditions for making sure that also next winter would needed out any gas dramas and that we would be able to secure enough gas for
Ukrainian domestic consumption but also to make sure that transit through crane would be safe and secure s for the next winter also for the next year’s thank you the question is you said a European energy Union doesn’t stop at the borders of Europe so I want to come to Turkish
Question you referred it several times but in clear terms what do you mean by it do you mean that countries like Turkey could become part of European energy union if so what does it mean in concrete terms beyond rhetorical you know statements secondly do you feel that there is genuine underlining
Genuine partnership win-win partnership between EU and Turkey on energy matters involving Caspian involving his math Kurdish Iranian and Russian issues rather than at work bases discussions and we pd Ankara that there isn’t much substance into this partnership that we talk a lot about and how do you think
This could be expanded so but time for three hours talk about now because we are very very sincere about the fact that we don’t think that the energy nation suffered at the European Union Board and of course Turkish is very privileged position as a candidate country as a country with which we have
High level energy dialogue the country with which we discuss and we are working together on such a strategic project like seldom gas corridor I was personally in cars where which is sitting in Turkey through which the southern gas core the pipeline is being routed where we’ve been am actually
Opening the construction of this pipeline and we are working together with presence of turkey and all other countries which are which are very much involved in the process of building up of southern gas corner from Azerbaijan through Albania Greece and Italy and we even established such a special advisory
Council which is making sure that this project is being executed on time is progressing well and that we would have new Caspian gas in Europe before before 2020 on top of it of course we are discussing with Turkey other projects I was just learning about the new develop
Plans of the plans of electricity cooperation between Romania and Turkey as you know we we pay a lot of attention to develop develop that Mediterranean is very important energy not only for gas also for the electricity and then new discoveries close to Israel new discoveries around the Cyprus new
Discoveries new discoveries in the in the Egyptian amazing think that’s lots of things to issue to discuss and turkey is in the position of being very strategic crossroad for the poor the energy routes to Europe so I think it’s just really national that they can’t that the turkey and European Union would
Continue this high-level discussion that we would really be working on this issue together because I believe that it would be of course profitable profitable for both so it’s a I would say not some kind of formal nicety but it’s actually real work which is already happening on the
Ground and I have to say that we’ve been very encouraged by the cooperation we had with the turkey on the energy issues over the last year’s and definitely since we started that the assist we started a new German project let’s continue with the debates on our panel i
Would like to invite a master constantinescu to share his thoughts with us on the theme of our panels and discussions that have just taken place however I will share with you my strong strong impression I have after several meetings within this famous csec framework of cooperation regional cooperation that
The Commissioner has mentioned here probably is the first time in many years when we really have the feeling that the countries in the region are on the spot are really trying to work together and with the with the facilitation of the Commission we are trying trying to create a common denominator of the
Interest at the regional level what is important and I am proud as a Romanian that we have managed to put on the European Union energy security map and on the future energy union map to go to put not only who Mania is a transit country for the future fluxes of gas
Future classes of supply European Union but also to put the Black Sea on the strategic map of the energy security for the European Union this is an important development is important not only from the perspective of economics but also from the perspective of searched strategic perception of this
Region and as well as we are talking about who may I do not want to enter here into details of of the projects the minister mentioned here the cooperation between countries in the region for setting the blue our Corriveau the interconnections for for setting the interconnections with Moldova which are
A priority for the Romanian energy agenda but what I want to mention are three political messages that are appropriate to get from Bucharest and are appropriate to give in the context of the visit of vice president voltage when we talk about future energy union it’s important to think that the design
Of the future architecture of new pipelines entering you for supplying with gas from different third parties suppliers need to respond to to the attributes of enhancement of the security for diversification of the gas supply and also must comply with EU rules this is very important and Romania
Will be very firm in promoting and safeguarding this principle of obeying 22 EU rules namely the third energy package the second message is that for Romania as well for other countries in Central and Eastern Europe Ukraine is a critical transit country for the supply of the european union with guests
Together with moldova we consider that our neighborhood deserves better attention much more attention from the strategic energy security point a point of view so ukraine will support the continuation of the transit of the gas supply through Ukraine and we’ll do our best in order to cooperate with the
Ukrainian partners be them in the business sector or the authorities in order to facilitate us facilitate the transformation of their energy system in order to become more responsible more transparent and more market-oriented and the third message refers to the transatlantic relation of work unfortunately I haven’t heard too much
Today about about the transatlantic relation and the importance of this ingredient in the future energy union and from this perspective I think that this relation is all and should remain strategic indispensable and beneficial for the future energy union B them if you are talking about sharing the best practices best information best
Technologies for progressing in the in the technologies in the energy sector or even to adopt some of the conclusions of the recently adopted the US what we ate quadrennial technological review which presents a set of new policies that would alleviate the energy security in many parts of the
Of the world next week in Brussels I’ll in Washington will be will convene the EU US Energy Council it’s an important framework of cooperation and opens and must open new ways of cooperation in adopting new technologies that could enforce the fifths pillars of the European Union and from this perspective
Romania strongly supports that the agenda endorses the agenda of this EU US Energy Council also mentioning in this agenda the progress needed in the energy sector for the cooperation regarding the TTP nkosi negotiations but also from the perspective or setting a comprehensive strategy for research and introducing
New technologies at the level of the European Union and at the level of the future energy union I’m representing a country which has a very clear record in terms of for innovation and research in the energy sector unfortunately we are counting only with the 0.1 patterns to 1
Million persons in comparison with 4.8 e at the level of European Union 2.6 available of you of the of us much more in Japan for example but we’re not comparing the ship Japan at this stage but if we really want to bridge a gap and be serious
About this fifth pillar of the euro energy union we must convince our partners in the Commission or partners at the level of European Union to put much more money and to create a more equitable distribution of the funding and off first of all of the attention regarding the need to develop the
Resources of innovation and research in the energy and environment a second probably intervene but I do not want to take too much time for my personal agency we will now move on secretary cheap profs Greece is one of the key players of the south or gas corridor
What is the Greek view on the energy security in southeastern Europe and eastern Mediterranean and how is grease fitting in the broader European energy security strategy that will be something I would like to hear from it’s in order to participate in this session especially so let me consult my written
Points Chris first of all strongly supports strongly support the initiative of building energy union it considers that energy security should be the main pillar of the energy union since the international energy agency defines energy security as the an interrupted availability of energy sources at an affordable price we believe that
European citizens should be provided with secure sustainable and affordable energy sources EU security of energy supply is a matter of collective action and precipices stationed in close cooperation among all Member States not only some of them an essential component is a diversification of sources and roots or fossil fuels no
Country should depend totally on one supplier the Ukrainian crisis manifested the need that transit of energy in whichever form should be consistent with the principle of freedom of transit and without distinction as to the origin destination or ownership the most effective way to ensure energy security without modifying what has been
Established by the European treaties and other treaties is to enhance regional cooperation approaches for Greece it is important to focus on the blogging energy in turn connections in electricity oil and gas among the countries of South Eastern Europe given the vulnerability of our region and the need for health supplies it is obvious
That our efforts should be aimed at creating the conditions that will make our markets more competitive and will increase their liquidity create common initiatives in security of supply and incentivize investments as a European Mediterranean and Balkan country but also the counter that belongs to the wide Black Sea neighborhood Greece
Envisions to plank and significant role the world enhancement of cooperation in the field of energy security root source diversification and infrastructure development energy security and diversifications are issues of top priority for our country grease is included in the countries of south eastern europe which are vulnerable with
Regard to the supply security of natural gas and this is important this is recorded not only in the European energy security strategy but also in the stress test report which took place in the summer of 2014 of course since 2000 we have managed to reduce our dependence on Russian gas
From a hundred percent to around fifty to sixty percent by adding to our energy mix both lnz and gas from other sources greece intends to enhance its role as an energy security provider for europe becoming a fiscal hub gas hub in south or nistam or maybe central europe given
The delivery of cashman volumes through the south and gas corridor and taap transatlantic pipeline the access to lng in the Aegean and the potential of the development of Garza sources in this Mediterranean the vertical corridor represents also an excellent source diversification option for the return then completion of the interconnector
Greece Bulgaria I HCB would enhance the organic growth of the existing network at the same time the prospect of a new dedicated pipeline that will bring grass and gas the south or Eastern Europe or Central Europe is also very significant Russians position as an energy supplier to Europe remains very important either
Through the Balkans country or through Italy norstrom I’m in northam number one proves that any form of a South Stream can be also viable and in the context of the eula distillation especially the third energy package furthermore I would like to emphasize the importance of bolstering energy cooperation as a tool
To safeguard security and stability in the east Mediterranean volatile regions so before I conclude I would like to stress some points we believe that the more supply networks are created in the south and east and europe region the more stability and energy security increases the disrespect we support every infrastructure project which will
Create conditions of secure them to supply for the countries of south western europe and will contribute deference of the case opening the sources in roots Greece’s support involutions infrastructure project in our region is not a matter of competition for us we want to become an energy hub achieving the maximum level
Of a diversification both through pipelines or by transporting energy resources by other means Greece aims to become a hub of diversified routes and sources ensuring competitive prices to the benefits of millions of consumer inheritance in particular we support the transit area Adriatic pipeline as part of the souther quran corridor which will
Bring natural gas from azerbaijan via Turkey to Greece Italian the rest of Europe from the transatlantic my blind Greece becomes its authentic entrance of energy supplies in the South honest Europe the development of a new vertical gas corridor connecting Greece Bulgaria and Romania aims to ensure and dropped it bi-directional supplies while
Promoting the hue priority corridor north south and Southern Corridor also the Greece Bulgaria and the connector ihc-p as a central part of the vertical corridor constitute a priority project not only for Greece and Bulgaria but also for the European Union’s new energy strategy at last but not least the
Prospect of delphi– stream a new dedicated pipeline that will bring risen gas to saturn eastern and central europe will constitute an additional natural gas route which also contributes the security of the supply in the region from a political point of view we support the plan for this pipeline which
Will start from the Greek Turkish border taking into account in any case the EU regulatory framework a condition of financing so concluding as a country we are willing to discuss all available diversification options or scenarios of sources and roots in our region considering the interests of the force
Of the market and to explore the prospects of compatibility with you hew regulations we believe that the Commission the European Commission in its efforts for in sonic energy security should other take drastic initiatives to combat energy poverty can be nerds inequalities among the European countries and regions it has energy
Infrastructure bridge the technology gap and reduce the energy costs in the weaker economies of Europe thank you very much I would like to now move on to mr. at wachau and I would like to focus into the opening remark with the transatlantic cooperation on the energy security issues such as emissions and
Environment Protection oil crisis new discoveries energy investments they have a last impact lasting impact on the dynamics of the energy security both sides of the of the pond we are entering the final year of the Obama administration Europe most certainly is looking at what comes next it seems that
Russia and Europe will continue to be together at least in the gas trade sector at least my question to you is what will the transatlantic cooperation on energy security would look like in the future and what will drive it what can what can we expect from American leadership regarding its European allies
On energy security and we know we cannot take politics out of the energy but can we put some energy into our transatlantic policies in the future thank you very much here will cross again for the progress forum I’m very happy to hear mr. Sesker which tell us
About the energy union because I’m going to miss him when he’s in Washington next week I’m going to be in California it’s I have to say first of all confess as an American that we’re not good as strategies we tend not to do strategies in spite of our political
Rhetoric on strategy we tend to think at least on energy to try to get the fundamentals right on a market economy for energy and then improvise like crazy when the opportunity presents itself any strategy we would talk about would only be in hindsight rather than than foresight so it’s really interesting to
Listen to European with a different perspective uh I think it’s difficult to for an outsider to understand what the energy union really means to be honest with you there was what’s it for is it for market integration which is very important in southeastern Europe is it to make sure that investment conditions
Are there provide investment conditions to allow private sector investment to come in on among other things energy infrastructure is it a joke is it just a whole bunch of pork barrel projects projects of common interests where no Spanish interconnectors will compete with interconnectors in this part of the
World is it about climate policy I think there’s a risk when you do a strategy are trying to be all things to all people and and end up with something that looks like less of the sum of its parts than their more than it’s some of
The part which I’m sure is it’s the objective I want to follow the ammunition at the beginning that to do be more than the talk shop that we should think about action so at the risk of not being invited again to the next Booker has forum permit me to be blunt and also
Maybe share some brats practices as my friend ambassador constantinescu have mentioned from from the think tank world and in the end the United States for as long as I remember I’ve heard about heard of Romanians talking about using your location advantage to be a transit corridor for Caspian oil gas certainly
From the first time your previous president this is Washington I’ve heard about it oh they’re all kinds of projects proposed Constanza comes up regularly I haven’t seen much action on that score in the last few years and what are they you know impediments to that what are the barriers that
Government all see need to remove in order for that to happen um and and I think those are the kinds of things that focus on part of south eastern europe’s vulnerability on energy and now i’m going beyond Romania has to do with business practices in the region of
Incumbents who are not interested in competition incumbents who are very keen on continuing the tradition of business practices with the traditional business partner and I think you know what I’m talking about I visited Bulgaria during mr. Marie sobs first time as Prime Minister three times and I met with him and his men
And came away with the conclusion that he was never going to do anything at least not that limber maybe things will change this time around and shortly after I left him think he gave mr. Putin the puppy than he Olivia and and and so you know there’s a reason why we don’t
Have a Greek Bulgaria into collector there’s a reason why we don’t have a Romanian a Bulgaria and to connect there and we’ve got faced those reasons the reasons at least in the case of Bulgaria has to do with vested interests and vulgar trans gas even Bulgarian energy holding which was created to promote
These projects became a barrier to implementing them so if European policy is to have meaning you need to address those questions it seems to me a second major point in the region I would make is that Ukraine is not going to fix itself and you know if mr. Sesker wish
Were present right now I would congratulate him for kicking the can down the road for one more winter the recent deal which was very important for everyone to have but right now in Ukraine which is a neighbor of Romanians of course you have a race between reform
And the third Madonna and and you know you have economy that is collapsing a close to ten percent negative economic growth this year things are very precarious and it does transatlantic policy no good for Washington or Brussels or major European capitals to think that we can muddle through twenty
Some years of experience on Ukraine leaders teach us the lesson that Ukraine always but those down it doesn’t matter up so this is something that we really need to face on on the transatlantic relationship I act again being very frank we’re going completely different directions on energy
Security and energy dependence ow we are approaching 90 percent self-sufficiency on oil and gas you are heading the other way and whether that overlap alignment of interests for example in the Caspian region they exist in the 1990s I still there or not it’s very questionable and
It has nothing to do with the Obama administration there is nothing to do with the next administration yes something to do with the facts are very very different at the U embassy in Washington a few weeks ago I met with a European envoi who I won’t name but you
Are free to guess who is new on the Central Asia portfolio and some of us think tankers asked him well what are the heart interests the Europe has in Central Asia he could not articulate energy did not come up once by the way it was about human rights democracy rule
Of law all know environment or very important issues but some of us said to him that if you can’t define your heart interests it’s very hard to coordinate us in the region to deal with you because they don’t know what you’re about and and if you were able to define
Your heart interests they would you actually give you more scope to work on the humidity rien issues then if you couldn’t so what is the strategy what is the role that Romania and the EU wants a play if energy security is a public good arm which some of us believe it is then
You could socialize the cost of that public good as the lit that the wing instead for example with the LNG floating LNG import terminal I have heard about costanza oh and gene longer than the Lithuanian the first came up with the idea for the first time so you could
Socialize the cost or you could allow the investment conditions to exist so that there’s a business case to be made ah but you can hedge and not decide because that would lead to no action but a strategy and vision perhaps so I’m very encouraged to hear mrs. escovitch
Talk about it estrin action plan by the end of next year but but also for Romania to figure out what his role in that action plan might be but I can’t give you a lot of optimism on transatlantic energy cooperation regardless of the rhetoric that both
Sides are willing to divulge in it which is that I can do that because I’m not in government and after this I will never be in government so thank you let’s move on to our next panelist missed method of youtube market integration is critical for smaller countries in this region in
Order to them to achieve better diversity of energy supplies the energy industry relies on economy of scale to justify significant investment the entire population of the balkans is smaller than the population of turkey alone Turk is a completely different player all together and the player that has a critical and important
Relationship both with Europe and with the US and Russia you have advocated for southern energy corridor for a southern energy code or rather than a southern gas corridor do you think that one day the southern energy quarter will combine flows of oil gas electricity in both directions is this a viable solution for
The energy security of Europe and Turkey I’d like to take also in the beginning the organizers for putting together such a high powered and rich content meeting I’d like to pick up also from where at left actually in terms of gently bashing European Union a little bit too much
Blue prints green blue white papers 2030s 2050s but so much disconnected from the reality on the ground unfortunately i’m a former diplomat but also a businessman not right now so the business world looks for different approaches rather than long on strategies but short on actions and under the European Union we I can
Recycle so many things as commissioner explained of the adult expanded out still not so clear it was take the projects of common interest to be precise there are 268 projects of common interests where is the prioritization where we are going to focus and also in terms of competitiveness we had you know
Lisbon 2010 vision as you remember 2010 came and gone but nothing happened in terms of competitiveness we are still behind and energy is a key component of enhancing European Union’s competitiveness in the world therefore if you allow me before moving to Southern energy corridor I’d like to say
A few words about the game changes in the rest of the world which will have a significant bearing on the European Union’s performance and most importantly I think when you look at the pictures we see a changing map of world energy demand and supply pictures it is a different world
I mean the world is used abuse misuse game changers one of them is that demand is no longer on that part of the world more coming from the asia-pacific region led by China and India forget about the Slovak slow down there near normal of seven percent in China the potential is
There strong growth demand will come from their provision not only from that region also Middle East and Gulf we always thought that this is a basically supply region but they are going to suffer significantly from the shorter supply the demand is growing very fast look at Egypt they used to export LNG
Now they have to import and Saudi Arabia likewise if they continue to consume the way they do and by 2050 Saudi Arabia might have to import crude oil that’s reason why they are moving into renewables as well as nuclear in many ways China the share of natural gas
Which is a common concern for all of us in china’s energy mix is currently about five percent the world average at around twenty twenty two percent there’s a huge potential for demand for natural gas and so it’s going to increase perhaps quadruple in the next 20 years LNG now
Both in volumes and prices we see a convergence of lng and pipeline gas in Australia as of today there are seven projects under construction LNG projects once they are complete this country will be providing half of what Russia’s cells to Europe 80 BCM of gas coming to the
Market so we are moving into the buyers market in many ways both in pipelines as well as LNG pipeline gas still we are not talking about Iran is going to take a long time for Iran to mobilize its you know 20 second largest gas reserves and putting it into
Where the demand high demand is you need to invest in production and infrastructure it will take a long time but it will happen Chuck Penniston is landlord we keep talking about bringing Chuck mangas to Europe across Caspian I always draw I mean so long as put it is
There there is only one way to bring the truth mangas across the Caspian send it as an email attachment and Iran will never allow that because they sell at a high price their own gas a series i think will be also reluctant because they have their upshur on view militant
Action so many new gas fields coming up and is matt gas in this environment where most of the big-ticket capital-intensive projects have been put on hold or cancelled will be quite difficult to justify both in israel levy a ton and we shall see about the egyptian discovery it’s going to take
Some time and europe has more than acting around 19 receiving terminals so LNG will be of course one of the options for that and geopolitical tensions will make life difficult for us without security physical security supply security and also cyber security you can’t have sustainable flow of energy as
Well and how are you going to deal with all this Isis issues in Iraq and Syria now the Russia becoming also turkeys not only northern neighbor but of southern neighbor somehow and the Caspian issues is match Israel the Egypt Turkey Cyprus and sauce see China Malacca Strait
Dilemma so there are so many hot points in the world that will make life difficult and keep us awake at night thinking how we will be dealing with these issues having said that perhaps I could briefly mention about the potential supply sources for European Union apart from
Russia no matter whatever we say in terms of reducing our dependence on Russia Russia is there and will be there and it’s a huge resource country they use energy SF up and against us now we are using against Russia as well sanctions and but we have to find a way
To manage Russia as a reliable partner and in the next few decades to come Russia also shouldn’t have illusions that if you doesn’t work turkey second-largest market does it work we have asia market where they demand is it will take ages to build this infrastructure and you know i was in the
Embassy in beijing when the scientists give could say agreement for the first time this everything is okay ninety percent you know we agreed and since then 89 and still many agreements signed but nothing is happening because this one person is about the price and also the russian concern not to be somehow
Constrained only to chinese market and so both Russia and i think it you are interdependent in a big way so they have to find the way in terms of business models and political engagements and the one big project that Russia is pushing forward or two projects i should say in
It they re business model or gut strategies is not streamed true they want to increase the capacity to 110 vcm so Germany gets about 80 so the rest will be distributed to rest of the Europe and Germany will be distributed there realistic or not I think we have to see
Because we’re discussing with that before the meeting that the buyers are reputable companies already committed so it’s highly likely that this would happen the other project is Turkish stream and putting came and kill the south stream in Ankara and reincarnated it as Turkish stream there was a
Euphoria 63 Museum of gas coming under the Black Sea not to Bulgaria about the turkey and now we have problems going on first about the price second about the volume I can the first leg with hooks shouldn’t be a problem this turkey is already getting about 15 Museum of gas
Why are you crate if this comes directed through Lexi and Russians are paying for that I don’t think that there will be any problem and now gas from also reduce it by how tall say we reduce it to Turkey for peace here so we shall see
How it will go but the sensitivities in Syria will have some impact on that and turkish President use I think a bit threatening language and the Russian starts trying to call me Dan separate what’s happening in Syria from the Energy Partnership which is a package deal between Turkey and Russia it
Involves nuclear power stations downstream investment blue stream security defense energy tourism so many other areas so our trade volume is about to go to the round I think hundred billion dollars so it’s a very important partner I don’t think it can be disrupted in a serious way both sides
Will find a way to deal with it in southern gas corridor not an energy I don’t like using this term corridor I think what we have there is 16 Museum of gas from shopkins two and six to Turkey tend to Southeast Europe and down the
Adriatic to Italy ten BCM is a peanut in the whole matter that we are discussing and therefore I would call it a forerunner of southern gas corridor perhaps because once you have other gas blowing it will be a magnet attracting once coursed fi design and reproduction coming from Kurdistan I’m very much
Interested in Iraqi Kurdistan I’m on the board of a company producing the largest amount of oil there and we’ll be producing of the gas from 2019 and up to 10 Museum of gas will come from Kurdistan Iran one day curved itself ten museum to tell even more as a page I can
Increase and is map gas you know where it will go I think the new discoveries in Egypt there is a highly likelihood of turkey get in the picture again as the off taker and also heading into the southern gas corridor so then if you are talking and then Turkish Street if you
Are talking about you know 50 60 Museum of gas then yes could be corridors porch archery for European Union now what will happen no way because no way is second to Russia in terms of supply the European Union not Africa Algeria Libya which potential there under utilized the
Pipeline from Algeria to Spain almost a third of the capacity but potential is there and LNG I think will be also a game changer because we shall see what will happen in the transatlantic relationship whether from Sabine Pass january or it takes is funny whether the
Pricing will be good but i think the price lng in Europe now is better than in Asia has been compared to pass and there was a huge difference between three vessels Atlantic Europe and Asia Pacific and this is also changing price means everything you can do lots of talked among
Ourselves the government’s could have strategies European Union can write another new paper for 2050 but at the end of the day the price will determine the partially the viability of the projects and turkey is a country which I call has a huge soft belly and because
We depend on imported energy to a great extent in natural gas ninety-eight percent we only produce two percent of our team in oil 93% and most of them coming from Russia and all the neighboring countries so therefore is not a only energy security matter for us it’s the national security matter why
This turkey is a regional economic powerhouse demand is growing so fast faster than our GDP growth about 6% and it’s the largest economy in the region that we need energy to feels just like China in a way and therefore I think there is a commonality of interest
Between EU and Turkey in terms of making sure that first there is stable environment in which production look at you Rach Rach can increase its production to 10 million barrels a day from the current less than 3 million eyes if there is stability security if there are sufficient investment flow in
There Iran will have the same question so we all have interest in making sure that there is geo political stability in the region for production for transit oration secondly again ed mentioned this if business environment should be conducive to investment we need around I think 27 trillion dollars of investment
Between now and 2030 of executor general meeting last week in London we attended together he was saying that we need 15 trillion dollars only for oil sector where will this money come from the money is there just an issue of finding a safe investment safe in Turkey we need
120 billion dollars for energy and associated infrastructure investment over the next decade it has to come it will come this way or another therefore I think the clear message is that the EU I think should focus more on the regulatory issues without making it excessively difficult to do business and
Give part strategic orientations but leave the private enterprises and governments a little bit Allah because it’s not a homogeneous Union 28 countries each of them have different energy mix France nuclear then Bulgaria hundred percent depending on Russia Spain Italy Germany call renewables and there are so many differences and how
Could you put all of them in the same basket and trees in the same way so there is need for more flexibility for European Union to develop these strategies policies but effective implementation in a business-friendly manners otherwise nothing will happen because investors will not put money into your corridors to your projects of
Common interest let me stop here and I’m sure there will be questions where I can also step in and I would like to now address the mr. bocharov and I would like to to ask for your view in the energy transport infrastructure needs of the region I understand you know almost
Everything that is to not to be known about this subject so if you’d like to address the room thank you if we come back for instance a minute say to always project and the matter was mentioned in its a Russian project Turkish stream on or three moment let’s say we didn’t just
Come out of the blue we’re part of a bigger grant strategy way which already has more than ten years old in Russia it’s avoidance of transit when that the transit is considered to be a fez note and said European Union and something let’s say unpleasant unstable unpredictable and way is like
Essential way is getting direct connections to the countries I mean civic matters and then it’s would it be China Germany or turkey iment the very interesting thing and we are talking about the first actual leg over Turkey stream enters the diffusivity amount of capacity it exactly the amount of gas so
To Greece and Turkey why our vessel destined pokin rooms and so basically two countries a minute say which which are crucial when the save Russia from economic and political point of view in this part of meet Iranian if we’re talking about that say North three moment let’s say like Graham maybe some
Doubts whether a capacity would be really hundred and ten BCM but for sure I’m in a setting we can guarantee words actually at least the third string will be built so what will happen we for Ukrainian transit 10 minutes and here it comes a quite a tricky point because
When you calculate on quotation capacity it shouldn’t only look on the amount of yearly volumes passing by but definitely see on the daily volumes because the daily volumes during the especially cold level it can be very high frequency van average over the summer volumes at least and here comes an interesting point on
What will happen if Ukraine infrastructure and why for instance as of May June weather shift in the Russian olesya min at least semi official regarding Ukraine Ukrainian transit let’s say the same what we’re going to keep worried that many questions and go some numbers good Zack as I 15 DCM etc
So Ukraine hoop in any case very like indispensable for a big volume especially during the winter or during the maintenance period for like five lines will it be like Turkish free more way your mom or one of three moments a thing is like we might see quite an interesting development where I mean
Definitely Commissioner was mentioning is a reform of energy sector Ukraine I will be unbundling so transportation system will become an independent operator and we might see what’s actually being confirmed at least of record by Iranian side with the delivery point of Russian gas will be move on Ukraine Russia border and quite an
Interesting thing that might arrange everybody I mean that may arrange the European companies which will come where and will be interested in like it’s pouring the domestic gas market with were quite high prices if national characteristic Eliza minutes and will be economic growth from when that will be
An interesting piece of high-tech in the count words how depressed is gas market in Europe it might be interesting for Russians if they get a man and say to sell the gas directly they don’t have a like-for-like edition of what you don’t have like this problems with transit a
Minute or green on the transit prices we definitely guy when will be very like likely to compensate where lots of the volumes and of course in case of vessel cmns absolutely interesting thing and then if she comes here and when I say what happening we will see also what
Actually what wiII happen Italy for LNG an interesting point LNG but look I think nobody mentioned it a magnetic was quite an interesting thing we are witness in the nutrition situation Europe extremely low prices for LNG and still look at the capacity you to choose a less than thirty percent of the
Build so like I’ve never been the period with such a grass such a low price is coming and capacity is I move on to first Idol so is very point of developing a program and let’s a question is like a magnetic boots what would be a future for resonances quite
Quite quite an antiseptic and regarding american elegy that’s also but definitely will come but also for the peaks the price picks a and but not in a bigger volumes and here we come and to an interesting point i would like to conclude my remarks of ways what actual was mentioned about level energy
Security or energy is a public good and here we have a things what’s energy has been very heavily politicized in both sides see how an example men would have been or three more cry for the terminal in the twentieth it’s a very political seriously not commercial like of course
The twentieth claim would because of a terminal we had at this town but it’s only party too I just see how wet contracts structured their contact to the typical oil-linked running a formula which went down because our prices are very low and these contracts actually
Which used to be very high year ago two years ago will be extremely low I mean by December and spot prices in Europe would be extremely expensive I’m glad to think and question is like where it acceptable should be decided by anyone advance what its contributes to wear any
Security we want to pay it but that’s when you do it you should clearly understand this is political decision which is the price you pay for oh wait a minute say and then you should accept let’s say the same for Russians I mean transit why ukraine this possible cheapo
N or three with you awake taking account the whole but this factor of unpretty bility from gas from the rushes for you would ever it’s put into the equation many many things like face I mean they go also to Germany it’s a nap event of and actually consumers are subsidized industry
Eminence it to build renewable it’s also political choice but when when you make it should be very clear minutes and not try to hide it intellect commercial like equations but really clear saying this is the price to pay is a commercial decision we’re not entirely commercial decision what we accept this because
AB&C thank you thank you very much to all the panelists and if there are I know the lunch is there and I am aware that people have been sitting in this room for a number of hours now if there are questions from the room they are very very welcomed for Mehmet in regard
To you mentioned about Russia and China and sometimes I get the impression that the negotiations on Alta is a way to get better prices from Turkmenistan for example or from Central Asia if you could maybe give me your views on that because Alta it just seems like it will
Never happen and it it seems that they try to keep this alive in order you know the Chinese are hedging other other players and you kind of skirted around the issue between Russia and China but it seems like that deal is frozen nothing’s happening whatsoever the price
Was always the issue but now the Chinese say we don’t have any money we can’t help you build the pipeline so maybe you could you know shed some light on that thank you yes I think it’s to project power of Siberia and alki and I think
Out I was designed some how to cut back the flow of gas from Central Asia those Cossacks also wanted to edit some additional volumes to China through the pipeline so there will be a inter gas competition between Central Asia and Russia to enter the Chinese market one
Of the reasons why Chinese are reluctant right now is that the demand growth in China is also somehow depressed because of what’s happening overall and also there is an oversupply of China because China already has its own sources sichuan person and orders and also seen John Terry Jr they already have the natural
Gas and they are also moving into coal bed methane then I think the shale gas reserves in China are more than what US has which is not being of course develop for other reasons and in terms of external supply Myanmar will be providing gas to China and also LNG will
Be coming in bigger amounts from Australia and the rest there for China has not created the gasification of the economy food yet to absorb all the guys that will be coming the potential is there but it will take some time therefore I think they would probably keep the second one the Altai gas
Pipeline more on the back burner and the price wise I think we took minused and is a special deal because the Chinese are doing it from the well to the market so they are extracting the gas through a production sharing contract bringing it to building also the pipeline which they
Already did and bringing to the market and such a business model nobody is able to do right now because treatments keep telling everybody that come and get it on the borders and therefore right now I think Chinese are getting around it 26-28 BCM of gas from Turkmenistan which
Will go up to 40 and it can go up to 80 85 Museum in the future and the pricing is not only cash payment but also some partners involved and therefore probably this projects will not go ahead the both of them power of Siberia and i’ll type project which would involve more than
400 billion dollars of investment and in this current environment i don’t think anybody will be able to put their hands into pocket for such a huge bill just to add the minutes on your question i think actually the whole strategy of negotiations with China on out I will be how like calm
Cause of your bathroom was the biggest mistake I mean we could have done at a minute see 2008 and just briefly explain why from point of view gasps from out I it’s much more interesting than supplies why I have a Western Road because you already had a huge oversupply of gas in
Your mouth we gases super cheap I mean it’s already like Gazprom can increase production capacity by hundred PCM almost immediately the central peak is only to build a pipeline and here comes a man and say the interesting point on negotiations if you let China Chinese companies to put the pipe when these
Guys would be competitive even compared to Turkmenistan gas say but for economic reasons and we sit with power Siberia Gazprom is not billing I mean it’s a to subcontract Chinese companies or to give them the power building the infrastructure like and that’s obviously and when it’s a pagina we met mentioned
Very correctly is not so interesting out there are so many options enter in this region and when you have to contact you took many stand cuz I can do bad guys I mean let’s say gas on Yammer I mean separate cetera mean this gas is competitive but they want to have it at
A very low price I mean if they would sign it and I think the biggest mistake he only hope gets almost in 2008 they underestimated the length of where the man crisis in Europe before the man would be back I mean let’s say very soon and they didn’t make any progress I
Think 2008 was very good year where we really like make some concessions because from where point of view it’s very easy just build as infrastructure you don’t have to like do it very difficult gasps feels like kabuki the for instance and when would say and our field in eastern Siberia where like you
Were supposed to salsa gas for power of Siberia that’s a menace to the biggest mistake but i agree amenity like with my madam and say like only one of them will go and most probably like power Siberia I think from a Chinese point of view is entirely about I agree with you entirely
About bargaining the Turkmen down so after spending ten years telling the Russians that we don’t want the Western route wyd to China finally accede to signing a MoU at the APEC summit in November beyond giving Putin a photo op is that it was terribly useful since the
Project isn’t going to happen anyway I think strategically it’s much more important for China the Eastern route Northeast Asia needs the gas is stranded from supply from both in terms of land pipelines from Central Asia is very far away also somewhat stranded form LNG as well so there’s very little alternative
So I think strategically for both countries the the the Eastern route is much more important the problem is the dealer sign in May of 2014 and in June the price of oil collapsed in July the the West sanction Russia so now what the price that was agreed to maybe in mayor
2014 doesn’t look so good anymore when the price of the commodity dropped in Russian country risk went up so I mean the dog that I will watch to hear bark is where whatever happened to the prepayment and Chinese loans of up to 25 billion dollars there was discussed
Around that time we have heard nothing about it in the past year and a half so I know I I agree with them I met it’s a matter of time but but that’s that’s the pipeline that will go first I’m pretty convinced then and you know I actually
Have a top 10 list of russian pipeline projects on the CSF is website if you care to look at that paper thank you very very much I think it was very very useful and intriguing and challenging at times it was very good thank you very much thank you