Gas Diplomacy in the Balkans on the Move

Natural gas diplomacy in the Balkans is set to intensify, the result of more initiatives put forward by the United States and Russia. 

In Greece, which has just entered yet another pre-election period, Energy Minister Panagiotis Skourletis met with U.S. Ambassador David Pearce to discuss proposed energy infrastructure projects in the region, namely the Interconnector Greece-Bulgaria (IGB) and the Trans-Adriatic Pipeline (TAP). 

Sources say both sides agreed to speed up the approval process for each project bringing Greece’s proposal to become an energy hub, with increased imports and redistribution of Azeri gas, one step closer to reality. The U.S. diplomat also arranged a meeting between Skourletis and Amos Hochstein, Special Envoy and Coordinator for International Energy Affairs leading the Bureau of Energy Resources (ENR) at the U.S. Department of State. Hochstein is known for spending considerable amounts of time meeting policy makers in Southeast Europe and promoting U.S. energy interests from a national security perspective, which is clearly a geopolitical concern and not one influenced by market forces or business logic. 

From this perspective, the upcoming visit to Athens all but guarantees a new round of discussions between the Americans and Greeks. At a May meeting with former Greek Energy Minister Panagiotis Lafazanis, Hochstein publicly disapproved of the proposed Turkish Stream and the envisaged Greek stream offshoot, which would deliver Gazprom's commodity via the Southern Balkans. He also said the Southern Corridor projects (TANAP & TAP) were realistic while Turkish Stream was not. Sources suggest the State Department is worried about continuous delays to the IGB project, the result of slow decision-making processes in Greece and Bulgaria. Additionally, the American side is also interested in achieving greater understanding of Greece’s energy relations, especially with Moscow. 

Nonetheless, the Vedomosti newspaper reported that Greece, FYROM, Serbia, and Hungary are on the verge of signing a joint memorandum of cooperation on Turkish Stream and its Balkan route. Serbian media have already named part of the route as the "Tesla Pipeline" in an obvious attempt to “nationalize” the section that will pass through Serbia. Insiders suggest the Greek, Serbian, and Hungarian foreign ministers will meet in Belgrade in September to announce an agreement that will see the exact route formalized. It should be noted the foreign ministers, not energy ministers, have taken the lead on this file. This is especially relevant to Greece where a schism exists between Skourletis and Foreign Minister Nikos Kotzias in terms of which project should be favoured more. 

Meanwhile, Bulgarian Energy Minister Temenuzhka Petkova has announced new efforts to push forward with South Stream, recently telling local media the project still remains a major goal for the country. Kiril Domuschiev, head of the Confederation of Employers and Industrialists in Bulgaria, noted that pipework for South Stream could also be used for Turkish Stream or any other project involving both Bulgaria and Gazprom. He added that no one would stop Bulgaria from doing business with Russia. 

All in all, a new round of diplomatic bras de fer commences in the Balkans between the U.S. and Russia whilst the real players, the consumers in major EU markets, eagerly await the completion of their own projects.