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President Putin's visit to Greece comes, as no surprise, overloaded with geopolitical overtones, mostly related to energy and potential acquisition of Greek state strategic assets. Yet it has become a non-event - full of expectation, short on delivery.
Russia successfully undermined Nabucco and other Western attempts to secure alternative supplies and routes for natural gas to countries in South and Eastern Europe, leaving them defenseless against Russian energy blackmail. The fact of life is that today Bulgaria has returned to 100 percent dependence on Gazprom for its gas supplies, whereas six years ago, it was less than 90%.
The story seemed boring in its closed-cycle routine.
Until TANAP and TAP came into the play and Greece started calculated substantial revenues from transit fees.
Soured relations with Turkey deprived Moscow of a key lever in implementing its original triad strategy of preempting its competitors from acceding to the EU gas market — at source; at critical infrastructure transit and entry points; and at destination end user point — CEE and SE markets.
At source, we are witnessing a variation of policies from open intimidation to enticement and charming offensives. In the early days of the Nabucco versus TAP competition, Gazprom resorted to open blackmail, threatening to destabilize President Aliev and support his opposition.
The Kremlin also used overriding strategic interest of an international energy major in its deal with Rosneft to secure much needed liquidity to cover shortfalls gaping in its balance sheets after the oil spill in the Gulf of Mexico.
Once TAP was picked over Nabucco, thus cutting off Central Europe from access to alternative Azeri gas supplies, Russia turned to blowing hot and cold offering to buy substantial chunks of Azeri gas in the hope of reducing remaining flows for export to Europe via the Southern Corridor. Baku instead offered to buy Russian gas for internal consumption to release greater volumes of locally produced gas for export. The
Kremlin spared no time and effort to erode the credibility of transit options for Caspian sourced gas through Georgia and most recently enjoyed speculating on the impact of instability in Turkey on future gas transit. Yet TANAP started on time and works are in full swing.
Terrorist attacks on critical gas transport infrastructure in Turkey are no rarity these days, notably in regions dominated by Kurds or prone to Islamic State retaliatory strikes against the regime in Ankara.
Major gas discoveries in the East Mediterranean have further widened Gazprom's defense lines trying to preempt competitors from entering South East and Central European gas markets.
The situation has become untenable with Greece taking center stage as a key factor in the counter offensive contemplated in think tanks in Moscow. At least that is what was the game plan.
Concerns over a fully fledged gas war with the West over South and Central Europe's gas market are believed to have played an instrumental role in substantiating the rationale for Russia's Syrian military operation and building up its permanent military presence - a naval and an air base. These new military assets should, at least in theory, enable the Kremlin to monitor and, where possible, to impede access of gas produced in the East Med gas fields to Turkey and onwards to Europe. Russian control over the Syrian economic zone comes into mind whenever considering transit routes to Turkey for East Med gas.
The start of construction on TANAP and TAP forced the Kremlin to act in earnest and stir up a blend of real and virtual policy actions in Greece and Italy. In spite of all the media frenzy and speculation that Putin will buy cheap access to Greek transport infrastructure and key gas transport infrastructure, including the LNG terminal at Alexandroupolis and the subsea infrastructure in the Adriatic or Ionian Seas, he recognizes the limits of his financial and political powers to turn tides in modern European politics.
Yet he can still inflict considerable damage to make regional politicians account for his words and actions.
While the Kremlin master is unable to deliver on his promises — Russia can no longer offer financial red carpets — as a master of brinkmanship diplomacy he still has some strong cards to play and stir trouble within the European Union, undermining key pillars of its energy security policies.
The Russian President's words could potentially fall on listening ears in Greece and Italy, notably of politically attuned businessmen that would like to additionally load up the capacity of the TAP, revive the Poseidon project (or the talk of it) and most importantly control Greek LNG regasification terminals, thus denying access of U.S. sourced seaborne shale gas to the SEE and CEE gas market.
The media hype around a new edition of South Stream could further strain relations in the EU, offering transit countries fresh, yet false hopes that they would be able to enter the end spiel with fresh strategic initiatives.
Putin's visit to Greece reverberated across segments of Southeast Europe's ruling elite close to Russia in at least two ways — it gave public prominence to Kremlin's favorite EU themes with sanctions lifting topping the agenda and the soliciting maximum support for Gazprom's business interest and market shares.
Even if nothing else comes out at the end — Bulgaria's and other regional Russian sympathizers will find it tempting to translate loyalty to Kremlin into votes, that could, at least in theory, further dilute diversification drives and ultimately slow down and even block competitive Caspian, Middle Eastern, Eastern Mediterranean and LNG flows into CEE.
Gazprom will be able to saturate the markets of the Southern Corridor with sufficient volumes of gas at competitive prices before diversification has ever happened, benefiting from privileged sales and transit contracts sealed with intergovernmental agreements raising the cost of entry for new competitors.
Some might associate President Plevneliev's decision not to stand up for new elections after his party GERB shied away from supporting him with some subtle maneuvers of the old Grand Slam coalition.
The Russian president knows pretty well that the notion of an EU destined South Stream-2 project from politically contentious Crimea would kill any chance of substantial debate. Yet he might persist in exploring and exploiting every new area of vulnerability in the energy defense shield of South East Europe and the EU in general.
Gazprom would not miss the chance to play the tune of its privileged relations with its main Greek partner, the Copelouzos Group, when considering the potential to control the FSRU in Alexandroupolis and make access for U.S. or other LNG gas to the Southern Corridor more difficult. The same applies to the potential of using the IGB in reverse mode for Russian gas via South Stream–2 to access the TAP.
Geopolitics were expected to come to the fore during Putin's trip to Athens in an encore of his old adage of charming and dividing EU members. Yet he had to face a new reality - even closest allies like Tsipras are unable to defy economic and political gravity and the reality of a waning Russia.
The Russian President seemed to have nothing to offer and received nothing in return.