Reprinted from Asia Times
Background is essential to understand the current game. Already five years ago I was following in detail Pipelineistan's ultimate opera -- the war between rival pipelines South Stream and Nabucco. Nabucco eventually became road kill. South Stream may eventually be resurrected, but only if the EC comes to its senses (don't bet on it.)
The 3,600 kilometer South Stream should be in place by 2016, branching out to Austria and the Balkans/Italy. Gazprom owns it with a 50% stake -- along with Italy's ENI (20%), French EDF (15%) and German Wintershall, a subsidiary of BASF (15%). As it stands, these European energy majors are not exactly beaming -- to say the least. For months, Gazprom and the EC were haggling about a solution, but in the end Brussels predictably succumbed to its own mediocrity -- and relentless US pressure over weak-link and European Union member Bulgaria.
Russia also advances a unified gas distribution network capable of delivering natural gas from anywhere in Russia to any hub alongside Russia's borders.
And as if it was needed, Russia gets yet another graphic proof that its real growth market in the future is Asia, especially China -- not a fearful, stagnated, austerity-devastated, politically paralyzed EU. The evolving Russia-China strategic partnership implies Russia as complementary to China, excelling in major infrastructure projects from building of dams to laying out pipelines. This is trans-Eurasia business with a sharp geopolitical reach and not subjected to ideology-drenched politics.
Russian "defeat"? Really?
Turkey also made a killing. It's not only the deal with Gazprom; Moscow will build no less than Turkey's entire nuclear industry, and there will be increased soft power interaction (more trade and tourism). Most of all, Turkey is now increasingly on the verge of becoming a full member of the Shanghai Cooperation Organization (SCO); Moscow is actively lobbying for it.
This means Turkey acceding to a privileged position as a major hub simultaneously in the Eurasian Economic Belt and of course the Chinese New Silk Road(s). The EU blocks Turkey? Turkey looks East. That's Eurasian integration on the move.
Washington has tried very hard to create a New Berlin Wall from the Baltics to the Black Sea to "isolate" Russia. And yet Team "Don't Do Stupid Stuff" in Washington never saw it coming -- yet another Putin judo/chess/go counterpunch applied exactly across the Black Sea.
So what Putin's judo/chess/go counterpunch accomplished with a single move is to have stupid EU sanctions once again hurt the EU. The German economy is already hurting badly because of lost Russia business.
The EC brilliant "strategy" revolves around the EU's Third Energy Package, which requires that pipelines and the natural gas flowing inside them must be owned by separate companies. The target of this package has always been Gazprom -- which owns pipelines in many Central and Eastern European nations. The target within the target has always been South Stream.
Now it's up to Bulgaria and Hungary, which have always fought the EC "strategy," to explain the fiasco to their own populations, and to keep pressing Brussels; after all they are bound to lose a fortune, not to mention get no gas, with South Stream out of the picture. Bulgaria alone reportedly has lost more than 6,000 new jobs and over $3 billion of investment due to the loss of South Stream.
So here's the bottom line; Russia sells even more gas -- to Turkey; Turkey gets much-needed gas with a cool discount; and the EU, pressured by the Empire of Chaos, is reduced to dance, dance, dance like a bunch of headless chickens in dark Brussels corridors wondering what hit them. And while the Atlanticists are back to default mode -- cooking up yet more sanctions -- Russia is set to keep buying more and more gold.
Watch those spears
This is not the endgame -- far from it. In the near future, many variables will intersect.