News

Meeting in Vilnius, the capital of Lithuania, on the fringes of a summit on energy security, the Lithuanian and Polish heads of state, Valdas Adamkus and Lech Kaczynski, signed a wide-reaching energy cooperation agreement on Wednesday 10 October with their Azeri, Georgian and Ukrainian counterparts, Ilham Aliyev, Mikhael Saakashvili and Viktor Yushchenko, to restore the Ukrainian oil pipeline between Odessa and Brody and extend it to the port of Gdansk in Poland in order to bring oil from the Caspian Sea to the European Community.

The agreement was instigated at the behest of Lithuania and Poland, two EU member states which are highly dependent on imports of Russian oil (as are all the new EU member states in Eastern Europe) but want to free themselves of dependence on Russia for energy supplies and to help ensure energy security for the EU27. In order to build pipelines to allow Azerbaijan to export oil without having to use pipelines that go through Russia, the countries of Azerbaijan, Georgia and Ukraine, members (along with Moldova) of GUAM, are using this new agreement to demonstrate their defiance of Moscow. (GUAM is a democracy and development movement set up in 1996 as part of the Community of Independent States to reduce Russia's influence in the post-Soviet region, move closer to the EU and NATO, and ensure energy independence)
Launched at the summit in Cracow on 11 May 2007, the intergovernmental talks on energy cooperation between Azerbaijan, Georgia, Lithuania, Poland and Ukraine did not take long to bear fruit. Less than six months later, accompanied by their countries' energy minister and the managers of their national energy companies, the Azeri, Georgian, Lithuanian, Polish and Ukrainian heads of state signed a deal on Wednesday to create a new consortium, Sarmatia, to build a new network of oil pipelines between Odessa, Brody, Plotzk and Gdansk.
The five presidents' aim is clear - to build a new pipeline between the Caspian Sea and the Baltic to transport oil from Central Asia to the European market by 2011, based in part on existing infrastructure. In 2001, Ukraine built an oil pipeline between Odessa and Brody to reduce its dependency on Russian oil and transport oil from the Caspian to the EU, but the Ukrainian pipeline has not been used because it does not link up with Europe but also due to the lack of supplies of oil from outside Russia. So Ukraine decided to use it instead to transport Russian oil from the port of Odessa on the Black Sea to Brody on Ukraine's western border with Poland. The new Sarmatia project will extend the Odessa-Brody pipeline to the city of Plotzk in Poland, where Poland's biggest refinery is located, and then on to the port of Gdansk. Oil from the Caspian, mainly from Azerbaijan but possibly also from Kazakhstan in the future (Kazakhstan's energy minister, Sauat Mynbayev, attended the meeting of heads of state in Vilnius), will be transported from Gdansk to the rest of the EU market.
Through this cocking a snoot at Russia, Poland, Lithuania, Ukraine and Georgia are clearly asserting their determination to shake off dependence on energy resources from a country which has been using its dominant position on the oil and gas markets to penalise governments not following the Russian political line. Describing the details of the agreement to the press in Lithuania, the five presidents were careful not to cause any greater upset to their Russian neighbour, choosing instead to highlight the prospects of greater regional cooperation and development for their countries. 'The project has both an economic nature and a huge political impact,' explained Kaczynski, the Polish president, adding: 'This is not made against any other country.' Adamkus, the Lithuanian president, said: 'This agreement indicates the unity and commitment of the entire region for progress, self-determination and a guarantee for sovereignty. It is just the beginning of a long road. I hope that we will continue working together to prevent insignificant technical disagreements from causing a slow-down of this project, which will unite our regions and strengthen energy security in the whole of the region.' Adamkus hailed GUAM's progress on democracy and reform, saying that the progress had 'prompted the EU to offer GUAM countries new models of closer relationships and deeper integration.' He urged other EU member states 'to establish a Group of GUAM Friends in the EU.'
Buoyed up by this support, Yushchenko, the Ukrainian president, stressed the importance of Azerbaijan and Kazakhstan for the EU's energy future: 'These countries constitute one of the leading locomotives that can help build the prospects for the European energy market.' Equally wary of offending Russian sensibilities, Saakashvili, the president of Georgia, welcomed the 'new strategic ties' that had been woven with his counterparts.
'This is a big change not only in the energy policy of Europe but I think also in wider geopolitics, in the wider configuration of the post-Soviet and post-communist space,' added Saakashvili. President Aliyev of Azerbaijan said the cooperation agreement 'would lead to more predictability, more cooperation and more mutual assistance between our countries'.
The five heads of state are planning to meet in Kiev, Ukraine, next year to decide on the full Sarmatia programme, the detailed route of the pipeline and its funding. The Ukrainian president commented: 'Today, I cannot see any serious problems, neither financial nor commercial.' The deal is a genuine act of defiance against Moscow, which ended its preferential tariffs for Russian gas exports to Ukraine following the Orange Revolution, and which after the general elections in Ukraine in September, has recently been pressurising the Ukrainian government to settle its Russian gas import bills.

Emmanuel Hagry