ANALYSIS - Traditional Balkan rivals battle for energy dollars
Date: 01-May-02
Country: BULGARIA
Author: Anna Mudeva
But to implement their planned oil, gas and electricity deals, Greece, Turkey, Bulgaria and Romania will need to attract billions of dollars in private funds while tackling problems in their own domestic energy sectors, analysts say.
"We will see increased competition for investment in the region. And in some way conditions look quite favourable given the stability in some of these countries," Stewart Gray, an analyst at UK energy consultant Wood Mackenzie, told Reuters.
Besides fighting for predominance, the Balkan rivals would also need to work together to build links among themselves as they plan to become energy bridges carrying Russian, Caspian and Middle East gas and oil to the EU's large energy market.
Turkey and Greece, which almost went to war as recently as the mid-1990s, are already burying the hatchet, improving Ankara's chances of profiting from Europe's energy priorities.
"The European Union wants an alternative to Russian supplies of gas particularly and the only way for it to come by pipeline is through Turkey," said Adrian Rouse, an energy analyst at Bender Security in Istanbul.
"So the countries in the region have to co-operate rather than compete if Russia is to be avoided," Rouse said.
PIPELINES GIVE TURKEY ADVANTAGE
Last month, Greece and Turkey agreed to build their first ever joint pipeline to carry Caspian Sea gas to the EU from 2005, while Ankara is also building a one million barrel per day oil pipeline from the Azeri capital Baku and a separate parallel pipe that will also pump Caspian gas to the Turkish network.
"Turkey is looking very good at the momemt and seems to have the best chances of becoming an energy hub," Rouse said.
But other analysts warned the crisis-ridden Turkish economy could hinder the country's prospects of attracting investment.
Turkish energy demand has not been as high as expected. It is contracted to buy at least 21 billion cubic metres of gas from Russia, Algeria, Nigeria and Iran this year and expects to consume 20 billion, which could produce supply gluts.
To solve the problem, Ankara plans to sell its excess gas to European markets via arch-rival Greece, which is meanwhile planning to invest 16 billion euros ($14 billion) by the end of the decade in its own bid to become the Balkan energy hub.
The only EU member in the region, with an annual rise in energy consumption of about four percent, Greece has agreed to expand an existing Turkish-Iranian gas pipeline to Italy.
Athens plans to discuss similar gas deals with gas-rich Iran and Azerbaijan.
After seven years of squabbles, Greece has also recently agreed with neighbouring Bulgaria and Russia to jointly build a 700-million-euro trans-Balkan oil pipeline.
BULGARIA, ROMANIA - POWER EXPORTERS
EU hopefuls Bulgaria and Romania, meanwhile, will compete to strengthen their positions as leading Balkan electricity exporters while deregulating their loss-making sectors - a politically charged issue because of the job cuts and price rises involved.
Officials said each country would need up to $4.5 billion of investment to raise power capacity and revamp existing plants, most of which are over 20 years old.
Bulgaria, which now covers nearly half of the region's power deficit, bowed to EU pressure in 1999 and agreed to shut the two oldest 440-megawatt reactors at its Kozloduy nuclear power plant by the end of 2002 and the EU is insisting Sofia decommissions Kozloduy's other two 440 MW reactors by 2006 at the latest.
"Our main competitor in power exports is Romania," said Dimcho Kanev, senior analyst at Bulgaria's power export monopoly NETC. "But if Bulgaria shuts down its old nuclear reactors by 2006 it might turn into an importer from an exporter now."
Sofia plans to resume construction of a nuclear power plant in Belene to compensate for the early closure of four of Kozloduy's six 3,760 MW reactors. It is in talks with Canadian, Russian and U.S. companies, trying to