At the heart of the Russian-Ukrainian crisis are the gas prices, which are still at the old rates of the Soviet Era, and which Moscow has agreed upon in support of the satellite countries of the USSR in the former Eastern Bloc. This crisis, however, has led to the suspension of Russian gas exports to the European continent through Ukraine. This in turn has prompted the Europeans to plan for new projects through which they can secure their gas supplies from new sources, and thus avoid being at Moscow's mercy again. Therefore, and as a result of this crisis, the map of the global oil industry is changing: Europe, for instance, is taking part today in projects that involve both producing and consuming parties in contrast to the previous gas agreements which were hitherto established exclusively between two parties (the exporter and the importer). This is all in order for Europe to have access to more flexible options and alternatives that would secure for the continent the gas supplies it requires. From this bid by Europe hence, stems the importance of the Nabucco pipeline project, the legal framework of which was agreed upon in Ankara last week. This project aims to establish a gas pipeline over 3300 km, from Turkey to Austria, and through which 31 billion cubic meters of gas will be exported annually from Turkmenistan, Azerbaijan, Iran, Iraq, and Egypt ( the gas from the two participating Arab counties will be supplied through the Arab Gas Pipeline network), to Turkey, Romania, Hungary and finally, Austria. These latter countries will be provided with about 50 percent of the supplies flowing through the pipeline, while the remaining 50 percent will be distributed to other European countries –it should be mentioned here that exports through this pipeline are expected to start in 2014, and that the national oil companies in the importing countries and the governments concerned, as well as the European Union, are all involved in the set-up and the financing of the Nabucco gas pipeline. However, Europe is not involved in only one giant gas project. In fact, plans are underway for a second project: The gas pipeline stretching from Nigeria across the Sahara and through Algeria to the Mediterranean Sea will extend over 4200 km and with a capacity of 31 billion cubic meters per year. This pipeline will transport gas from Nigeria and Algeria and exports are expected to start in 2015. Of course, Russia, the superpower with the largest gas reserves in the world, does not accept to remain a spectator in the face of these challenges threatening its domination over the most important market for its natural gas. Consequently, Russia is building the South Stream gas pipeline with an annual capacity of 31 billion cubic meters. Its proposed route will cross Turkey into the Bosporus Strait, then to Greece and Italy, with exports through this pipeline expected to start in 2016. Russia is also building the North Stream pipeline into Europe, and which in turn will bypass the Ukraine. In addition to these two pipelines, negotiations are under way for the establishment of a huge gas pipeline into China, which will help Russia to compensate for any losses in the European market. Since the European energy reliance on natural gas is increasing, gas is also being procured through other sources. Supplies are being secured for instance through the liquefied natural gas (LNG) tankers from Qatar, and the natural gas exports from pipelines and LNG tankers similarly from Libya, Algeria, not to mention the liquefied natural gas incoming from Egypt. This is in addition to the Persian gas pipeline project stretching from Iran to Switzerland, and the gas supplies from the North Sea. In this vein, these new project are expected to significantly alter the balance of gas supplies to Europe, compared with the situation today, where Europe now depends on a third of its natural gas requirements on Russia, with the other third coming from Algeria and the rest supplied through Europe's own reserves. Meanwhile, it is only natural that the construction of these giant pipelines and the challenge of establishing multilateral accords over a single gas agreement, are all not easy tasks, but rather ones that require a great deal of efforts not previously seen in bilateral agreements: In the Nabucco pipeline issue, for instance, the United States was finally persuaded of the need for Iran's participation in providing the pipeline with the necessary supplies. This was no simple matter for Washington, especially at this time. Nevertheless, this had the desired outcome of reduced European dependence on Russian gas. Meanwhile, other problems in the Nabucco project are still outstanding: Up until this very moment, for instance, Iraq has not yet specified which natural gas fields will supply the pipeline. There are also many questions arising in Egypt about the long term availability of the required reserves, with the same question being raised in Azerbaijan as well. The problem lies in how to balance the future domestic gas needs with the volume of gas exports that have been committed to the pipeline, and in whether these two countries can adhere to the required levels of gas supplies that should feed the Nabucco pipeline with all of their other obligations associated to gas exports and their future domestic needs notwithstanding. Finally, there is also the problem of constructing the pipeline that will carry the Turkmen natural gas across the Caspian Sea, and the environmental impacts of such an endeavour on fish farms and caviar harvesting in the landlocked sea. There is no doubt that one of the biggest geopolitical impacts of the Nabucco pipeline project will be the strengthening of Turkey's role as an oil and gas transit state from the Middle East, Russia and the countries overlooking the Caspian Sea up to Europe - something that will further Turkey's regional role and influence, with this role being expected to be enhanced further with the influx of Russian gas to Israel via Turkey and the Mediterranean Sea. *. Mr. Khadduri is an energy expert
