Russia takes on 'sensitive topics' at Black Sea energy summit

September 28, 2006 - 0:0
SOCHI, Russia (AFP) -- The energy ministers of 11 countries opened talks here Wednesday on sensitive topics including new pipelines and energy contracts at a summit of the Black Sea Economic Cooperation organization.

"The Black Sea region is an indispensable part of the global energy market ... as a connecting link between Europe and Asia," Russian energy minister Viktor Khristenko said at the summit's opening session Wednesday.

Russia is chairing the BSEC this year in parallel with its chairmanship of the Group of Eight, for which it chose ‘energy security’ as the main theme.

Numerous BSEC ministers affirmed the energy security principles adopted at July's G8 summit in St. Petersburg during the Wednesday morning session, but other topics underlined the complexity of regional energy relations. Khristenko said the group would discuss the extension of the Russian-Turkish Blue Stream gas pipeline, which he said had "proved its effectiveness both in financial terms and in terms of securing regional energy security."

Russia and Turkey have clashed over Blue Stream since the pipeline came online in 2003, however, and delivery volumes have been growing at a slow pace amid price disputes and lower demand projections from Turkey.

Khristenko said Russia was considering expanding the pipeline to Israel and possibly to southern and central Europe, which analysts say would allow Russia to increase shipment volumes regardless of Turkish demand.

The Russian minister also said "significant progress" had been made on the planned Burgas-Alexandropoulis oil pipeline, which Russia hopes will carry 30-35 million tons of oil per year to Europe.

Another potential point of conflict is an expected bilateral meeting between Khristenko and his Ukrainian counterpart Yury Boiko on a new gas supply contract.

Energy relations between Russia and Ukraine have been tense since Russia cut natural gas supplies to its neighbor on January 1 during a price dispute, leading to supply shortfalls in Western Europe.

A Russian energy official earlier said that BSEC member state Greece was discussing a possible long-term natural gas supply contract with Russian state gas monopoly Gazprom from 2012 forward.

Numerous BSEC members are also at odds with Russia over the Energy Charter Treaty (ECT), which supports market liberalization in energy transit and investment.

Representatives of Armenia and Moldova stressed that support for ECT principles was key to regional energy security, while Russia, which has signed but not ratified the ECT, has said it needs considerable revision.

The BSEC was formed in 1992 to coordinate the economic interests of Black Sea-region states such as Russia, Turkey and Ukraine.

The group is one of several regional organizations embracing countries bordering the sea, and holds numerous annual ministerial meetings to coordinate the group's economic policies.

Russia directs 30 percent of its gas exports to BSEC members.

The group's main members are Russia, Albania, Armenia, Azerbaijan, Bulgaria, Georgia, Greece, Moldova, Romania, Serbia, Montenegro, Turkey and Ukraine.