Ministers representing the five member states of the GUAM grouping met in the Lithuanian capital of Vilnius last week to mark ten years of the loose international alliance. They succeeded in signing a deal which may finally clear the way for construction of an oil pipeline linking the Black and Baltic seas, and move that is designed to bolster regional energy security and reduce the region’s dependence on Russia for its energy supplies.
GUAM member states Azerbaijan, Georgia and Ukraine together with Poland and Lithuania agreed to begin work on building a 500km extension to the existing Odessa-Brody pipeline in west Ukraine northward on to the Polish Baltic port of Gdansk and from there on to the wider European market.
When completed, this new pipeline route will be used to bring Azerbaijani energy supplies from the Caspian Sea to European markets, sidetracking Russia and breaking the Kremlin’s monopoly on energy supplies from northern Eurasia.
Continental connotations
President Yushchenko hailed the move as a step towards developing the transit potential of the GUAM grouping and a way of opening up alternative energy routes to central European markets.
”This is a unique page in the implementation of such a global project. We remain fully committed to supporting plans to create an energy bridge between Europe and Asia,” the Ukrainian President commented.
“This agreement will have a major impact not only for the signatory countries, but for all of Europe,” added Polish President Lech Kaczynski.
The estimated USD 700 million pipeline is seen as a strategically crucial project that could go some way to disarming the energy arsenal of Russia, which has been accused of using its control of regional energy supplies as a political weapon to punish states that try to move away from its geopolitical orbit. In recent years Ukraine, Belarus, Georgia, Lithuania and Latvia have all been subjected to what they have described as harsh energy sanctions, while the Kremlin maintains that its energy policy is dictated not by political considerations but market forces.
This new pipeline agreement is the latest development in a long-running geopolitical saga dating back over ten years which has seen successive Ukrainian governments change course over its commitment to the project for fear of offending Russia.
The flow of the existing pipeline was previously reversed by Ukrainian authorities sympathetic to Russia’s regional powerbroker ambitions, but with a new Orange coalition about to be announced there is no longer any impediment to the continuation of work on the pipeline project.
Relying on Russian goodwill
Russia responded to the apparent Orange victory at the polls in Ukraine’s recent parliamentary elections by issuing demands for immediate payment of gas debts said to total over USD 2 billion, prompting comparisons with the January 1, 2006, decision to cut off Ukraine’s gas supplies. Ukrainian officials expressed dismay at the size of the alleged debt while European Union spokesmen called for open discussion of the issue without resorting to threats of a renewed gas cut-off.
After a brief series of negotiations, the parties appeared to have resolved the stand-off and set out a time table for repayment of the debt, EU officials praised the tone of discussions. “The rapid solution of this bilateral commercial issue and the level of transparency shown during the affair strengthens the reputation of Russia and Ukraine as reliable supply and transit countries to EU markets,” Energy Commissioner Andris Piebalgs was quoted as saying.
However, Opposition leader Yulia Tymoshenko, who is widely expected to be named prime minister of an Orange coalition government this week, has long been an outspoken critic of the current deal to provide Ukraine with cut-price energy supplies, and has threatened to tear it up upon taking office and revamp the entire Ukrainian energy sector.
Fears remain over the danger of disputes arising in the coming winter months that would leave Ukraine without the necessary reserves of gas and exposed to pressure from a Russian government keen to see it cave over a variety of policy issues in return for guarantees over the delivery of energy supplies.
