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Putin's pipeline 'gambit' leaves West unimpressed

04 December 2014, 12:13 CET
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Putin's pipeline 'gambit' leaves West unimpressed

Vladimir Putin - Photo EU Council

(MOSCOW) - Was he flexing his muscles or beating a retreat? Opinions are divided over Russian President Vladimir Putin's surprise announcement to abandon Moscow's $50 billion South Stream gas pipeline.

Some analysts viewed the unexpected December 1 decision to scrap the project to pump natural gas under the Black Sea to southern Europe as the Russian president again flexing the country's energy muscle.

The move, those experts say, saw Putin taking Western nations to task for the cold diplomatic shoulder and host of economic sanctions they've inflicted on Russia since violence erupted in Ukraine.

"The decision will allow Russia to walk away with its head held high," Alexei Gromov, an analyst at the Institute for Energy and Finance, told AFP.

Yet others interpreted the move as a rare sign of weakness and retreat by Kremlin leaders finding it increasingly hard to use gas monopoly Gazprom to pursue political goals at a time of looming recession, falling oil prices and sluggish demand in Europe.

"The new gas pipeline as Russia's geopolitical weapon of the 2000s has ceased to be effective," liberal business daily Vedomosti said in an editorial.

"The abandonment of South Stream has every chance to become a historic precedent," added news website Gazeta.ru.

- No 'panache' -

Reality may lie somewhere between those opposing zero-sum views on South Stream's fate.

Brussels long suspected the gigantic South Stream project as a means for Gazprom to seal its domination over the European gas market, and insisted other suppliers be allowed to access the pipeline to address those anti-trust concerns.

Russia balked, but an EU-backed rival project to bring Azerbaijani gas to Europe through Turkey was slow in development and will be smaller than originally hoped.

Opponents of South Stream also considered it a geopolitical manoeuvre aimed at reducing Moscow's reliance on Ukraine as a transit country after clashes with Kiev over prices led to interruptions of gas shipments to Europe in 2006 and 2009.

The current crisis in Ukraine, where Moscow-backed separatists have battled authorities since April, has made the pipeline an even greater source of tension between Moscow, Brussels and Washington.

Faced with growing European wariness over South Stream amid deteriorating political relations with the West, Putin on Monday wrote off years of negotiations and an estimated $5 billion already invested in the project by announcing Russia would now build a pipeline to Turkey.

The move leaves a handful of southern European nations highly dependent on the Russian gas supplies that flow through Ukraine that could be disrupted if tensions flare during the winter heating season.

Putin supporters say the Kremlin strongman -- known for his penchant for sudden policy U-turns and limelight-stealing swagger -- demonstrated again his ability to improvise and build new alliances as ties with the West sink to post-Cold War lows.

If so, however, few observers in the West seemed impressed.

"Putin was purported to have another card up his sleeve," Steve LeVine wrote in Quartz, a US-based financial website, referring to Putin's new plan.

"But the announcement lacked the panache of its antecedents - the new pipeline had no name, no length, no price."

- 'Weak decision' -

Meanwhile, some analysts warn Putin may not find life easier by replacing Europe with Turkey in the deal.

"Turkey can prove to be a more difficult partner than the EU," said Tatyana Stanovaya, a Paris-based analyst at Russia's Center for Political Technologies, citing serious differences over Syria.

"It's a weak decision."

What some Russian media called Putin's "Turkish gambit" is according to other analysts just spin on Putin being forced to jettison one of his pet projects as Russia's economy creaks towards recession, struggles with the burden of Western sanctions, and watches both the ruble and oil prices tumble.

"Russia can no longer afford to be playing an economic superpower without being one," wrote Gazeta.ru. "It will now be necessary to live within its means."

Fyodor Lukyanov, chairman of the Kremlin-connected Council on Foreign and Defence Policy, agreed. Writing in the government daily Rossiiskaya Gazeta, Lukyanov said pushing ahead with the pipeline in current conditions would have amounted to "a bizarre obsession."


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