Tuesday, March 16, 2010

'Cold Energy War' dying - market first, politics second

According to a special section of London’s Daily Telegraph (with content from Russia’s Rossiyskaya Gazeta), energy transport and politics can go their separate ways following the realization of new gas and oil pipelines in Europe. Cold war-like tensions, it writes, between Russia and Europe will only last until the continent moves past Cold War energy infrastructure.

Apparently, energy infrastructure deals and the launch of strategic energy pipelines signal the true end of the Soviet Union’s energy legacy. The piece notes that tensions over gas deliveries between Russia and Ukraine were avoided this year, while Russia’s stranglehold over countries in Central Asia has been broken. Pipelines from Turkmenistan and Kazakhstan to the Far East are considered ‘game changers’.

The Kremlin’s response has been to build more pipelines, also heading east. One possible result of this emerging lattice of pipelines is that energy relations in and around the Continental and Asian landmass will become more civilised as competing routes force both buyer and seller to put market interests first, and politics a definite second.

Despite Moscow’s usual wariness over its eastern neighbor China, the new, emerging situation on the ground, including construction of the Trans-Asian gas pipeline, has even prompted the Kremlin to agree to deliver 68bcm of natural gas a year to China through two new pipelines starting in Siberia.

[Via http://europeoilandgas.wordpress.com]

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