Washington never tires of reminding Europe of the dangers of over-reliance on Russia as an energy source, muttering darkly that in the future the Kremlin will use its growing presence to influence European governments in a manner detrimental to their own interests. It is not an idle concern, with some analysts predicting that by 2020 Europe could be dependent on Russia for up to 70 percent of its natural gas imports.
Given their historical experience, such warnings resonate with former Soviet republics and Eastern Europeans, which helps explain the arrival on March 5 of the Greek Minerva Lisa tanker in Gdansk, Poland, carrying 83,000 tons of Azeri crude from Turkey's Mediterranean Ceyhan port. Polish state pipeline operator PERN pumped the oil to its storage tanks prior to transshipping it to the PKN Orlen SA refinery. Another tanker laden with more Azeri oil, the Maltese Tour tanker, is slated shortly to deliver an additional 128,000-ton cargo. While such shipments are a drop in the bucket of Poland's daily oil consumption of 68,000 tons, the shipments nonetheless represent a determined effort between producer and consumer to avoid being overly dependent on the vagaries of Kremlin energy transport policies.
The fact Azerbaijan is willing to ship its crude from the Mediterranean around Europe into the Baltic as Poland absorbs the transit fees is a clear indicator to Moscow that both former Soviet republics and Eastern European consumers have grown weary of the Kremlin's hardball pipeline politics. Furthermore, it is likely such cooperation will deepen in the near future, as on Feb. 27 Azeri President Ilham Aliyev concluded a two-day visit to Poland, during which he met with Polish President Lech Kaczynski and Prime Minister Donald Tusk. Aliyev's agenda included a visit to the liquid fuel terminal in Gdansk. Mutual talks included economic cooperation, with a special focus on energy security.
During the two-day talks, energy security was high on the agenda. Kaczynski, during a news conference, referred to Azerbaijan as "one of Poland's most strategic partners," adding, "Being an important exporter of crude oil Azerbaijan has also vast opportunities as far as gas exports are concerned.
"Poland should also be interested in this aspect of cooperation. We want to develop mutual relations on all applicable fields."
Kaczynski and Aliyev also signed an agreement regulating bilateral ties.
The talks represent a cardinal objective of Kaczynski's government, as Poland has been seeking ways to diversify its energy resources for years, not only seeking alternative suppliers of natural gas beyond Russia, but also promoting efforts to link its electrical energy grids into European networks.
Independence from Russian supplies is still years away, however; Poland depends on Russia for its hydrocarbon needs. Russian imports provide 95 percent of Poland's annual consumption of 23 million barrels of oil and 45 percent of the country's annual use of 14 billion cubic meters of natural gas.
The previous Polish government viewed dependence on Russian oil and gas as a serious threat to Poland's energy security because Russia's Ministry of Energy openly acknowledged in 2003 that Russia would not hesitate to use its oil and natural gas exports to advance its foreign interests. Warsaw also had firsthand experience of Russia's pipeline politics, suffering disruptions in gas supplies in 2004 and 2006 and oil supplies from Russia in 2007.
Polish and Azeri determination to free themselves from Russian supplies extends far beyond the two countries, and might even revive a moribund project, Ukraine's Odessa-Brody pipeline. The Ukrainian government built the line in 2001 without having firm commitments from anyone for exports, forcing a reluctant Kiev in 2004 to agree to transport Russian oil in the opposite direction, for export from Odessa rather than westward to Central European markets as originally envisaged.
In October 2007, Poland's PERN, Ukraine's Ukrtransnafta, Lithuania's Klaipedos Nafta, the Georgian Oil and Gas Corp. and the State Oil Co. of the Azerbaijani Republic signed an agreement establishing the Sarmatia consortium, which was designed to expand the Odessa-Brody pipeline to an Odessa-Brody-Plock-Gdansk project. The goal of the project is to transport oil from the Caspian Sea through Azerbaijan to Georgia's Black Sea Supsa port, from where it would be transferred by oil tankers to Odessa and enter the pipeline for transmission onward to the Polish cities of Plock and Gdansk on the Baltic, from where it could be transshipped to European and international markets. The project is still in the planning stages, and contracts for Caspian oil have yet to be signed. The expansion of the Odessa-Brody pipeline is slated to begin next year, with the first oil transports of Caspian oil to Poland expected to start in 2011.
While little is certain about the global energy industry, it seems likely the Kremlin will view the Odessa-Brody-Plock-Gdansk project as a direct threat to its monopoly and act accordingly. Given Vladimir Putin's track record and the fact Russian President-elect Dmitry Medvedev is the former head of Gazprom, those involved in the project may well see the policy recommendations of Russia's Ministry of Energy study implemented well before 2020.
