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Hydrocarbons and the Turkey – Cyprus relations

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By Floros Flouros(*) and Dr. Athanasios Dagoumas

In this study, the importance of HydroCarbon (HxCY) exploration in Exclusive Economic Zones (EEZ) and most particularly its implication on the involved countries is examined. Moreover, it is well known that Cyprus has been in conflict and confrontation with Turkey during the last decades. It will be argued that the continuation of the HxCY exploration from Cyprus inside its EEZ will strengthen its position with regard to Turkey which means that it will give to the Cyprus Republic a competitive advantage versus Turkey.

The Critical Success Factors (CSF) that affect positively the Cyprus-Turkey relation in the case of HxCY exploration in Cyprus’ EEZ will be identified and then prioritized/ranked by importance/contribution to the examined relation. In addition, a list of export options for the Cypriot government is also considered and it will be investigated whether political or economic/financial factors should be taken into consideration for the choice of such export options.

Framework of analysis

Literature Review

The Eastern Mediterranean region has been facing challenges also related to the energy landscape. Since the economy is foreseen to grow further while at the same time the population of the region is expected to grow from 45.3 mill in 2010 to around 60 mill in 2030, energy demand should also increase significantly over the next years.

On the basis of the Exclusive Economic Law (Law no. 64(I) 2004 amended by 2014 Law), “Cyprus declared its EEZ, the outer limit of which shall not extend beyond 200 nautical miles from the baselines” from which “the breadth of territorial sea is measured in accordance with UNCLOS” [1].

In Table 1 short summary is presented regarding the agreements that Cyprus has concluded so far in the East Mediterranean region with its neighboring countries like Israel, Egypt, and Lebanon but not with Greece, Syria and Turkey and the Palestinian Authority.

Table 1: Agreements between Cyprus and other East Mediterranean countries

Country Date of delimitation agreement/EEZ Remarks
Egypt

March 2003

May 2006

Delimitation Agreement entered into force

Agreement about cross-median line HxCY resources

Lebanon January 2007

Delimitation Agreement entered into force

Not ratified by Lebanon yet. Some difficulties still exist, due to ongoing dispute between Lebanon and Israel about their EEZ settlement

Israel February 2011

Delimitation Agreement entered into force

Even though Israel not signed UNCLOS yet

Greece   Not yet (!)
Syria   Not yet
Turkey   Not yet
The Palestinian Authority   Not yet

In Figure 1, the Maritime Boundaries in the Eastern Mediterranean region are presented [2].

Figure 1: Maritime boundaries and Exploration blocks in East Med at end-2012

cyfig1

(Source: Darbouche at al., 2012).

Turkey considers that the Northern part of Cyprus is of geostrategic importance for at least two reasons: it affects Greek-Turkish relations and it is of global geopolitical interest due to the location [3].

Despite Turkey’s recent activities in Cyprus’ EEZ, that are mainly aimed at preventing Cyprus from exercising its sovereign rights in its EEZ, all licensed companies finally “proceed with their exploration programs, in line with the licenses granted by the competent authorities of the Government” [1].

Finally, it is important to identify those Critical Success Factors (CSFs) that affect positively the Cyprus-Turkey relation in the case of HxCY explorations that have started in Cyprus’ EEZ. As indicated in the previous Table 2.l, CSFs are those key variables that have a tremendous impact on how successfully and effectively an organization meets its mission and in the examined case how Cyprus can continue exploration activities in its EEZ leveraging such a success to its relations with Turkey.

The Research Question

Further to the previous analysis, it is now necessary to address the Research Question and then to search for the useful data and information to answer it. The Research Question is considered very crucial even though the least addressed part of the research process [4].

In the current case, the Research Question can be defined as below:

Identify the Critical Success Factors (CSFs) that would affect positively the Cyprus-Turkey relations in the case of Hydrocarbon Exploration in Cyprus’ Exclusive Economic Zone (EEZ).

Empirical research

  • General
  • The identity of the research which took place is presented as following:
  • Research: Qualitative.
  • Type/Method: Interview (one – to – one and electronic).
  • Type of Interview: Semi structured.
  • Sampling: Purposeful sampling and most particular snowball effect.
  • Size of sample: As mentioned above; the sampling is terminated when no new info is forthcoming.
  • Selection criteria: relevant to the field, highly educated (academic degree and over), ethnicity of Cypriot, Greek, Turkish, other.
  • Period: beginning of May – end of July 2015 (3 months).

Analysis

The results are presented in Figure 2, in which EU and USA are considered as the most influencing actors in such cases, since they have been mentioned by almost all the interviewees. Following, Cyprus and Turkey are those countries that are supposed to affect more Cyprus in its actions related to the HxCy exploration and furthermore in finding choices on how to export any quantities from its territory in the near future.

At the same time, commercial companies like those participating in the license part, exploration activities, etc. are also considered that they play an important role in the final plan. Finally, other players mentioned during the interviews are counties like Israel, Greece, Egypt and the Northern part of Cyprus.

Figure 2: Main Stakeholders involved in the exploration and trading gas in East Med

cyfig2

(Source: Authors, 2015).

Stakeholders as institutions like EU and UN are believed to be important factors that can affect the progress and success of the projects and any exports in the region. Technical and geological issues, like the depth of the sea, the morphology of the surface, whether onshore or offshore facilities are all considered by the responders as critical parameters for the preparation, design and evaluation of projects in the gas fields in the Eastern Mediterranean region as per the survey took place during the period May-July 2015.

Figure 3: Critical Success Factors (CSFs)

cyfig3

(Source: Authors, 2015).

Regarding the possible options the Cyprus to export gas, in Table 2 are presented several answers from the responders during the survey:

Table 2: Answers from interviewees regarding better options for Cyprus to export gas

Answer 1 Answer 2 Answer 3 Answer 4 Answer 5 Answer 6
Pipeline to Jordan From netback view: Egypt could give the best ROI/netback. However, there is a risk since climate is not the best. It looks the most reasonable option but not sure if it can be finally done. LNG is not recommended due to small qties. The LNG looks problematic. There is a need for infrastructure. LNG at Vasilikos: it adds power to Cyprus (having the infrastructure at your own land). There is space available at Cyprus. The ideal would be that CY-TR-ISR to cooperate closely.
Pipeline to the Palestinian Administration in the West Bank. From the risk view: the LNG looks preferable, which is not possible to be done (taking into consideration existing amount of gas). CY-Greece pipeline: Does US support it, since it could compete and replace Russian gas? Alternative ways for development needed and the needs for infrastructure that make sense to export the NG. Pipeline to Cyprus due to the distance and geopolitical reasons. LNG or pipeline is a function of qties (need to be high).
Pipeline to the Gaza Strip. If qties 3 tcf or more, then LNG. Thus, taking into consideration existing amount of gas it does not look a choice (and additionally Noble does not have any experience with LNG). Exports to Egypt: yes (+) while Exports to Turkey: neutral (-).

Pipes and LNG are f(qty, market prices).

Export to Greece is not recommended because it would have serious technical problems (deep sea, seismic region, distance, etc) and thus a huge cost

If you want to add value to Turkey, then you decide to pass the pipeline through it. Thus, the question is whether it can go to Greece. Israel-Cyprus-Greece electricity interconnector is a political issue.
Pipeline to Turkey.

Pipeline to Greece: no way. Huge cost, big risk.

Turkey: it could be an option (in theory) but Turkey would increase its power in the region.

Exports to Palestine is not recommended for Israel. Export to Egypt: yes, because of existing unutilized infrastructure and Egypt is looking for NG to support its growth plans. It is feasible. Sisi needs supporters/allies. Depends on negotiations for the solution of the Cyprus problem  

(Source: Authors, 2015).

While energy supply is important for the economic growth of a country, there is a correlation between energy use and GNP. Since GNP is not the only factor “of level of civilization or quality of life in a country”, it is necessary “when planning for energy needs of a nation to consider alternative socioeconomic models, with emphasis on the socioeconomics and not only the economics” [5].

If a solution is not found in the Cyprus problem then it is impossible to see any cooperation with Turkey. Regarding export options for Cyprus, he mentioned that apart from the local market it can be also said that “the preferred monetization option is regional pipelines” and that Egypt “has been identified as the main export target for the project, together with the Cyprus domestic market” [1].

Cyprus mentioned that “Cyprus needs to continue trying to convenience Turkey on the advantages it stands to gain from adopting a policy based on international law and from contributing to the settlement of the Cyprus problem; a settlement that could allow the Turkish Cypriots to share the benefits of Cyprus’ natural resources and wealth [6].

Findings

There have been several cases in which the decision to start and build a project related to the energy (i.e. pipeline Baku-Tbilisi-Ceyhan, BTC) was taken based on political and geopolitical parameters and reasons and not economical-financial ones, since the later did not support the continuation of the project [7]. It has been seen an inclination from the state to “use disruption of natural gas supply in order to promote foreign policy goals” which is supporting the idea of political domination when decisions are taken in energy policy of a country [8].

Based on the results of the qualitative research the CSFs that would affect positively the Cyprus-Turkey relation in the case of HxCY in Cyprus’ EEZ can be summarized in terms of importance as following:

  • Most of the responds are related to the political/geopolitical environment as the most important success factor.
  • Stakeholders as institutions like EU and UN are believed to be important factors, also.
  • Geological issues like the depth of the sea, the morphology of the surface
  • Technological issues as whether the facilities are onshore or offshore
  • Commercial and economic issues, related to exploration costs, current and future prices in the Oil and Gas markets, incentives and taxation policy from the government, participation of the government into joint venture schemes with private companies, etc.

A short/medium term approach and a long term one had been considered as following:

Short/Medium term approach: due to the current status of Cyprus’ political relations with its neighbor’s, the liquefaction seems to be the only feasible option for gas exports for the country. Thus, there can be two subsequent options:

  • Develop a joint liquefaction facility with Israel. This would help Cyprus to dispose of enough gas to synergies for its own LNG export projects. In addition, it would be EU’s interest since PCIs are already a reality and it also would assist strengthen EU’s security through diversification of sources. However, such a choice require huge investments while gas prices have been weakened radically during 2015.
  • Participate in a construction scheme to build an export terminal in the Jordanian Free Economic Zone at Aqaba. This would help Jordan to get gas supplies through pipeline and thus serve also local needs.
  • Continue efforts to participate into energy schemes, which to a great extent are “partnerships of an economic nature, can ease tensions, freeze or even terminate conflicts of a political nature” [1].

Long term approach: The regional geopolitical complexity in the Eastern Mediterranean is already affecting the progress in export gas in the area and as soon as regional conflicts are resolved then the pace of development will be increased significantly.

Cyprus needs to “continue trying to convenience Turkey on the advantages it stands to gain from adopting a policy based on international law and from contributing to the settlement of the Cyprus problem”; by this, it could possible for the Turkish Cypriots to “share the benefits of Cyprus’ natural resources and wealth” [6].

Conclusions

Theoretical Findings

Based on the analysis herein, it can be said that any continuation of HxCY Exploration from Cyprus inside its EEZ can strengthen its position with regard to Turkey and this could be supported under conditions like the solidarity of the EU and support from US, the close cooperation with the neighboring counties of Israel and Egypt, the participation of international companies in available business plans in country’s territory and finally the continuation of the efforts of Cyprus towards the Cyprus problem which will eventually allow the Turkish Cypriots to benefit of Cyprus’ natural resources and wealth.

Based on the analysis presented in this study, it has been suggested that the LNG option seems to be one of the most realistic and promising options for Cyprus to cooperate with its neighbor country Israel provided that the state of Israel can relief any concerns about security and sovereignty. Then, the onshore liquefaction at Cyprus would be decided whether it would be related to the existing field of Aphrodite or others to come on stream in the coming years.

The other option for building FLNG in the Mediterranean or Red Sea could alleviate Israel’s fears and provide additional paths to new markets such as Asian avoiding the transportation through the Suez Canal.

Cyprus has decided to explore the possibility of exporting NG discovered in the Aphrodite field to Egypt through an underwater pipeline, while NG from the Aphrodite field will also be brought to mainland Cyprus for power-generation purposes. He also mentioned that the government of Cyprus “does not exclude prospects for energy cooperation with Turkey in the future provided that the Cyprus problem is first settled” which is a pre-condition [5].

Based on the literature and the analysis took place, the decision making for a country whether to proceed with an investment or project in the energy sector might be a combination of several parameters such as political or economic, geographical, historical, social, technological. It is also related to each country, since each one designs and follows its own energy policy and it will have differences from those of other neighbor countries.

Policy Proposals

The recent discoveries of HxCY in the territory of Israel and Cyprus, with a good probability in the future for counties like Egypt, Lebanon and Greece to follow, offer substantial opportunities to further deepen relations between them. Even though current quantities do not seriously affect global correlations, however the power of the closest markets shows the importance of energy as a synergist factor and this is important to be taken under consideration by the governments and authorities in the region.

Greece hardly can substitute Turkey in the planning of Israel and Egypt; however, it can be proved as a reliable partner whose opinion continues to have a casting value in regional affairs. Greece has shown that can achieve tangible results through practical agreements.

Actions that Greece and Cyprus take in pursuit of broader partnerships, initially to start a climate of mutual understanding, and then to design the conditions for foreign investments are deemed good. Without having any given differences in the Eastern Mediterranean region, the main challenge is to turn to normality amid intense pressure on societies and regimes.

Experienced diplomats note that Cyprus need to continue to build regional alliances with Israel and Egypt but at the same time to emphasize the development of its exploration program. During this period, time seem to be working in favor of Cyprus, while the same sources estimate that it is not easy for one company to lease drilling platform to carry out research in an EEZ internationally recognized as belonging to the Republic of Cyprus.

By invoking international law, being on military alert, strengthening strategic alliances with regional players, and harmonizing with the geostrategic interests of the US and EU (as well as the economic interests of large international companies) in the region, Greece, Cyprus and Egypt are taking cautious and systematic steps during a difficult period hoping to find more substantial backing among their allies and partners. Although the research was implemented before the discovery of the Zohr field in Egypt, this development works in favor of deepening the cooperation among Egypt, Cyprus and Greece. Some projects, such as the East-Med pipeline, increase significantly their maturity and possibility to be implemented, as disadvantages over the required gas volumes are surpassed, while they could guarantee considerable financing from the European Commission as a Project of Common Interest (PCI), towards enhancing European energy security and a functioning internal energy market.


(*) Floros Flouros has studied Chemical Engineering at the Aristotle University,  Nottingham Trent University, UK and the University of Peloponnese, Greece.  Floros has held several progressive managerial roles in the chemicals, minerals and polymers industry for the last 17 consecutive years. Email: floros.flouros[at]ntualumni.org.uk

REFERENCES

[1] Himonas, S. 2015. Interview during the Qualitative Research of this subject.

[2] Darbouche, H., El-Katiri, L., Fattouh, B. 2012. East Mediterranean Gas: what kind of a game-changer?. Oxford Institute for Energy Studies. NG71.

[3] Murinson, A. (2006). The strategic depth doctrine of Turkish foreign policy. Middle Eastern Studies, 42(6), 945-964.

[4] Haverland, M. 2010. Conceiving and Designing Political Science Research: Perspectives from Europe. European Political Science, 9: 488-494. Doi:10.1057/eps.2010.61.

[5] Sonnino, T. 1977. A National Energy Policy for Israel. Energy, 2: 141-148.

[6] Zodiates, G. 2015. Interview during the Qualitative Research of this subject.

[7] Nourzhanov, K. 2006. Caspian Oil: geopolitical dreams and real issues, Australian Journal of International Affairs, 60: 59-66.

[8] Shaffer, B. 2011. Israel-New natural gas producer in the Mediterranean. Energy Policy, 39: 5379-5387.

First published by Geopolitics of Energy (GoE, March 2016) under the title: “Identification of the Critical Success Factors that affect positively the Cyprus Turkey Relations in the case of the Hydrocarbons Exploration in Cyprus’ Exclusive Economic Zone (EEZ)”. Republished by the authors permission.

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Gazprom and Europe

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Football in the 21st Century is not only a sport but a global brand in itself. Football allows others to feed and profit off of it as well. Global corporations have used this opportunity to leverage into newer markets and, or, improve their reputation in existing markets.

Gazprom; it is on players’ jerseys in Germany, in Russia, in Serbia, at games in England, and on side-lines in Italy. Gazprom is a Russian natural gas company. Teams make money offering jersey space to sponsors selling things like credit cards, cars, insurance companies and cell phones. But Gazprom is not like most sponsors: private companies with products football fans can buy. Instead, it is a company owned by the Russian government that makes money selling natural gas to foreign countries. It is everywhere in European football. So, if football fans cannot buy what they’re selling, why is Gazprom spending millions to sponsor games?

The answer is part of a larger story that’s changing the sport. Gazprom’s partnership with these clubs is mutually beneficial because they provide a crucial revenue stream to the football club while in turn gaining publicity and a foothold in key target markets in which they are hoping for an increasing profit margins they represent a successful confident company that yields significant power and influence.

It is a corporation that reflects the values and ambitions of the Russian state the company via a series of commercial partnerships and high-profile sponsorship deals is now firmly in the collective conscience of European football fans few are quite sure whatthe company stands for or what this foothold means and in any case they are largely apathetic which oddly mirrors the aims of Vladimir Putin and increased influence in Western culture becoming a major player in events without the stigma of political connections or ulterior motives. Foreign countries use companies they own to burnish their reputations abroad, and to understand why Russia is involved, one needs to closely observe a  map. Russia has the world’s largest natural gas reserves and most of the mare located in Arctic gas fields controlled by Gazprom. The company is led by Alexey Miller, a close ally of Vladimir Putin. Since 2005, the Russian government has owned a majority stake in Gazprom. Meaning company profits are under Putin’s control and gas sales, along with oil,account for around 40% of Russia’s annual budget.

Various maps showcase how European countries are on Russian gas and Eastern European countries are more dependent than countries further west. At the end of the 20th century, Germany represented the biggest opportunity for Gazprom. German Chancellor Gerhard Schroeder had announced plans to phase out coal and nuclear power, which meant Germany would need more natural gas to maintain their energy supply. Gazprom wanted to get it to them, but there was a problem. To get to Germany, Russia’s gas needed pass to through pipelines crossing countries charging Gazprom transport fees. And most of them went through Ukraine, a country that has a complicated relationship with Russia. Today, Ukraine still charges Russia $2-3 billion dollars every year to pump gas through to Europe. So, starting back in 2005, Russia began working on a strategy to bypass Ukraineand ship their gas directly to Western Europe.

This led to the birth of the Nord Stream pipeline,  a route through The Baltic Sea straight to Northern Germany.In late 2005, Gazprom was in the final stages of financing the project and Germany’s chancellor was preparing for an election. During his time in office, Gerhard Schroeder had become friendly with Putin and critics in Germany were increasingly concerned about the Russian leader’s growing influence.

Just a few weeks before the election, Schroeder met with Putinto sign an agreement officially approving the pipeline. Two months later, Schroeder lost his re-election but by March he had found a new job: overseeing Gazprom’s pipeline to Germany. It also came out that, before leaving office, Schroeder had approved a secret Gazprom loan that provided over a billion euros to finance the project. Soon, the story of Gazprom’s big project in Germany was becoming a story of scandal, corruption, and the creeping influence of Russia. But then the story changed.

In 2006, Gazprom signed a deal to sponsor the German team FC Schalke 04.At the time, Schalke’s finances were worrying team officials and Gazprom’s sponsorship provided money the team desperately needed. At a press conference announcing the deal, a Gazprom chairman said Schalke’s connections with the German energy sector were why they decided to become their sponsor. Schalke plays in Gelsenkirchen – a town in Germany’s Ruhr Valley, where much of the country’s energy industry is based. It’s also close to the town of Rehden, a hub for pipelines to the rest of Europe and home to Western Europe’s largest natural gas storage facilities.

Interestingly, Schalke was not Gazprom’s first deal. The year before, they had bought a controlling stake in a team on the other end of the Nord Stream route: the Russian team Zenit St. Petersburg. Gazprom’s investment made Zenit a major force in soccer. Two years after taking control, Zenit won their first-ever league championship. They’ve been able to sign expensive foreign stars, like Belgian midfielder Axel Witseland the Brazilian forward Hulk, and Gazrpom uses Zenit for marketing stunts: like having players scrimmage on the side of their offshore gas platform.

In 2006, as Gazprom logos were revealed around Schalke’s stadium, German headlines were hailing the Russian gas giant for pumping millions into the German team. To celebrate the deal, Schalke’s new jersey was unveiled in a ceremony before Schalke and Zenit played a friendly match in Russia. And, over the next few years, the Gazprom logo would become a team symbol displayed at Schalke games and printed on official merchandise. Schalke also won a championship in 2011 and by then, Nord Stream had been completed, and that year, Gerhard Schroeder, Angela Merkel and other European officials gathered to celebrate as it began pumping gas to Germany. There was also another struggling team whose jerseys started featuring Gazprom’s logo: The Serbian team Red Star Belgrade. Red Star was about 25 million dollars in debt when Gazprom signed to become their jersey sponsor.

And, again, there was also another pipeline: The South Stream would have bypassed Ukraine by going directly through Serbia to Southern Europe. That project closed in 2014, but Gazprom has continued increasing their access to Europe by building Nord Stream 2, a second pipeline doubling the amount of gas flowing from Russia to Germany. Gazprom has also expanded their empire to include energy partnerships with Chelsea Football Club[1], Champions League and the sport’s most famous tournament: the FIFA World Cup.

These sponsorships have made Gazprom’s logo familiar not just to fans in Europe, but across the world.“We light up the football. Gazprom. Official partner.”It’s in commercials before games, and on jerseys and sidelines once it starts. FC Schalke fans have also started to see Nord Stream 2 ads at home games. And, while climate activists like Greenpeace have staged protests to point out Gazprom’s threat to Arctic resources, Gazprom had no trouble renewing their sponsorships.

Now, Russia controls nearly half the gas consumed by Europe and other countries are learning from their example. Etihad, Emirates, and Qatar Airways all are owned by sovereign states in the Middle Eastwith interests that go beyond selling airline tickets. As the example of Gazprom shows, having a prominent footballing sponsorship offers a way around bad publicity by winning approval on the field. If you’re a fan, that can feel like a big opportunity: their money helps teams win major tournaments, but it’s starting to change the sport itself. Gazprom like so many others, is an opportunist who strives to be linked to sporting successes. Gazprom’s reasons for investing so heavily in sport could be compared to any global organization. It is a fascinating  means of advertising. It has become common to see a Serbian team sponsored by Russia’s gas company facing off against a French team sponsored by Dubai’s state-owned airline, it’s starting to seem like the field is hosting two competitions at once: A match between two teams, and a larger play for foreign influence that continues long after the final whistle.


[1] Owned byRoman Abramovich since 2012 seven years prior to this deal Abramovich sold his shares in Sibneft his oil-producing company to Gazprom for an estimated 10.4 Billion Euros.

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New oil pipeline in northern Thailand may worsen flooding

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A pipeline stretching from central to north-east Thailand promises to “promote Thailand as an energy hub in the region” and “increase energy security”, according to the Ministry of Energy. Construction began in mid-2019, despite local communities objecting that the largely Chinese-financed project could worsen flooding and contaminate water.

The 342km pipeline will run two metres underground and link Thailand’s north-eastern province of Khon Kaen to an existing pipeline in the central province of Saraburi. Energy Minister Sonthirat Sonthijirawong attended a ceremony on 5 February to lay the foundation of a 140 million litre oil tank in Khon Kaen’s Ban Phai district at the end of the pipeline.

Altogether, it will pass through 70 towns in five provinces including Lopburi, Nakhon Ratchasima and Chaiyaphum.

The route was agreed in August 2016, when the energy ministry signed a deal with the project investor, Thai Pipeline Network (TPN).

The ministry has promoted the pipeline as a more efficient means of transporting oil to the north-east, claiming it will lower oil prices and cut down on accidents involving road tankers.

TPN director Panu Seetisarn said the pipeline will avoid 88,000 road tanker journeys each year.

The THB9.2 billion (US$300 million) project is largely funded by a loan from the Chinese government, which stipulates that at least 35% of the equipment used must come from China. The precise details of the deal have not been made public. However, Panu revealed that TPN and undisclosed investors are investing about THB1 billion each.

The project has been progressing quickly since January last year when the government approved the environmental impact assessment (EIA) report.

In February, TPN – a subsidiary of Power Solution Technologies (PSTC) – signed a contract with China Petroleum Pipeline Engineering (CPP) to construct the pipeline within a 30-month period. And then works commenced in mid-2019.

Panu also revealed that the company wants to link the pipeline to the capital of Laos, Vientiane, and to southern China.

As well as the controversial north-eastern route, the first phase of another route, from central to north, is also under construction. The northern route is being developed with the ultimate aim of linking Tak province into Myanmar’s Kayin state at Myawaddy.

Flood risk

“This will lead to a big flood, bigger than the recent one,” said Ow, a local resident of Khon Kaen’s Ban Phai district, recalling flash flooding following tropical storm Podul that put homes under more than 1.5 metres of water for over a month last summer.

She fears the construction of an oil tank a few kilometres away will worsen flooding in future.

“Looking at its huge area and how high they have raised the land to level it for construction, [it] will definitely block all waterways,” she said, adding: “What will happen to us if there’s a big storm again?”

“After discussion with my neighbours, we [all] share the same concern and decided to file a complaint to the local authority but nothing happened,” said Ow.

The villagers’ concerns are justified, according to Jaroonpit Moonsarn, an environmental official at the Department of Environmental Quality Promotion (DEQP).

“There are two creeks, the Huay Bandoo and the Huay Khamrian, in the area that are natural waterways helping to drain waters in the district. The construction has blocked these significant waterways,” said Jaroonpit.

She believes another tropical storm in the area would create a bigger flood than the one last August.

Dust, pollution and public safety

Flooding is tomorrow’s fear, but dust is today’s suffering, said Ow, referring to air pollution caused by the construction of the oil tank that is affecting surrounding communities.

“We filed a complaint to the construction company, but they told us to complain and seek compensation from their subcontractors. It’s still unresolved. We don’t know who to talk to,” she said.

Jaroonpit also noted local concerns about the project once it’s finished, such as explosions, chemical contamination of local groundwater and heavy traffic. Road tankers will still be needed to distribute oil from the pipeline to nearby provinces, and additional tankers are expected to operate if the road to Laos is improved.

“Public safety should be seriously studied and discussed, including how to manage such risks and how to compensate,” she said.

“This involves the daily life of local people and they should have been informed clearly before the project’s construction approval, otherwise it leaves all the burden on them,” said Thawisan Lonanurak, former secretary general of the North-eastern Chamber of Commerce.

Apart from the risks to public safety, there are several basic questions about the project that need answering, according to Thawisan.

“Will oil prices in this area really be cheaper? How cheap? And most important, how transparent is the deal between the state and private investor?” Thawisan said.

“These questions should be answered at least during the EIA and hearing process, but it hasn’t happened,” he added.​

Witoon Kamonnarumet, senior advisor to the Khon Kaen Federation of Industry, said hearings for the EIA were conducted twice among a small group of people selected by the project owner and the company contracted to produce the EIA. They were not open to the general public.

“Even local businessmen in my network said they know very little about this project and are not clear on what it will really look like. We heard it would come two years ago and then there was a long silence and then construction started recently,” Witoon said.

“At the EIA hearing, most of the time was used for a company presentation focusing on what they had done in other areas,” said Paitoon Mahachuenjai, Nakhon Ratchasima’s Dan Khun Thod District head. They said that if there was “any problem during construction they would be ready to help,” he added.

Local activist Suwit Kularbwong, chairman of the Human Rights and Environment Association, said communities affected by the project have limited access to information about it.

“Where will the pipeline pass through exactly? How much area will be expropriated or compensated, and at what rate? They still don’t know. This goes against the [country’s] 2017 Constitution on public information and public participation for such a project,” Suwit said.

“This project has been initiated by the state and developed with a top-down approach, without sufficient consideration of its impacts, and with poor public participation. What will happen if more and more people along the pipeline know about the real impacts after construction and learn that they were not informed beforehand? Local opposition is foreseen. And government should be aware of this as it could affect the ongoing construction of the project,” he said.

Chinese investment and public discussion

Suwit said there is inadequate public awareness and discussion about projects and Chinese investment.

“The influence of Chinese investment in this region as well as the Mekong has been growing rapidly in recent years, without taking human rights violations and environmental impacts into account. And [it’s been] actively supported and facilitated by our Thai government.

“The key question is how ready are we for such massive investment from China? How ready is our government to protect its people’s interests from developments like this one where they are losing their land?” asked Suwit.

To address public concerns, Suwit suggested open public forums so that discussion could take place on the controversial oil pipeline and broader development plans for the north-eastern region.

“That which is missing from the past EIA process should be fixed there. At the forum, all basic project information should be available beforehand. It should be open to participation and discussion from all groups,” Suwit said.

Thawisan shared the same suggestion. “Local universities and academics should also play an important role to help digest technical and academic information for local people to understand the project properly,” he said.

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How Turk Stream is forcing Europe on its heels

Sisir Devkota

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Russia laid down two gas pipelines from its territory, one from the topmost northern hemisphere, famously named as “Nord Stream” and the most advanced, latest with all rights “Turk Stream”; that passes through Turkey, a nation that now finds pride in being able to connect Russia with the rest of Europe. In recent years, European nations have heavily relied on American natural gas supplies and new set of renewables; while sanctions over Russia in the past decade primarily stalled business on both sides, Europe has now changed its language on Russia’s desire to sell oil to the continent. On paper, Europe is openly welcoming a new source of energy supplies in the name of profitable competition, yet changesare only the tip of deep lying geopolitical stakes. Turkstream was launched in the beginning of January; and so, did a brand-new Russian policy take effect that could change foreign relations in the years to come. But, why is Europe changing course suddenly?

Geographically, between the two pipelines on the north and south is Ukraine sitting ignored by Russia’s willingness, more so; it is also a statement of available options at Putin’s hand. It is well noted that Russian aspirations are serious; investing on two different routes has been costly, but the oil rich nation has caught all eyes. While Turkey is flaunting a newfound friendship on the East, other nations in the region, including Ukraine, are assessing exact Russian interests; a major miss out on economic benefits would not be rational for a set of other rather neutral nations than Ukraine. Consider the politics of language, while Nord Stream is still very vague and could include Baltic and western Scandinavia, “Turk Stream” is a prize won in the eyes of a shared Mediterranean neighborhood. It is like saying that Turkey won the rights to sell Russian reserves to European clients, that also have inhibitions against historical Turkish aspirations in the EU. Still, other reasons are held higher.

Uncharacteristically, China is behind all the insecurities in Europe. There is no secret on whether Sino-Russian ties could yield a similar energy route between two nations, both infrastructural might and President Xi’s willingness to expand the Belt & Road projects could easily accommodate energy linkups. For European leaders have realized that such possibilities could most possibly deteriorate Europe’s energy as well as economic balance. By 2030, Chinese energy needs are going to double from what it is now; Europe does not desire a vociferous Chinese demand taking away Russian reserves to the East. Alarmingly, European nations also realize that soon, a proposition as such is highly likely, given how current competition has taken down prices. After a decade of disturbing sanctions testing Russian sanctions, it will be waiting patiently for an overhaul in the form of ceiling new rate of prices. For Europe, America still might not have been redundant, but the US-Ukraine soft spot, certainly has.

The European dilemma does not end yet, for Russia has played the cards on both sides; it will have to forge a face-saving approach with Turkey, given how it has treated Ankara over issues relating to EU membership. Like an astute capitalist, Moscow is promising to feed Europe, whilst also biting into its wounds, forcing to deal with problems that may allow Russia an affirmation to jump over Chinese demands. On the backdrop of a successful Brexit, Turkey will be teasing at the European sanctity, a group that has continuously reminded it of being unsuitable. For Europe’s dislike, Russian reserves now flow through Turkish territories and might successfully ruin newly established competitors in the energy market. Underestimation has cost Europe again while Russia has lastly taken afoot. It is only the beginning of a grand Russian policy.

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