Will new pipeline ease the West's energy woes?

As global leaders prepare to tackle energy issues at this weekend's G-8 summit in Russia, dignitaries from 50 countries are gathering Thursday on Turkey's Mediterranean coast to inaugurate a key piece of the puzzle.

Twelve years in the making, the $4 billion Baku-Tbilisi-Ceyhan (BTC) pipeline will pump 1 million barrels per day of Caspian Sea oil toward Western markets when it becomes fully operational next year.

Though that amounts to only 2.5 percent of global oil exports, analysts say the flow could significantly improve global energy security.

Indeed, the US-backed pipeline has long been seen by Western governments as a way to tap Caspian oil without involving Iran and Russia. But with Turkey increasingly courting energy-rich Russia, the project may prove more prickly than anticipated.

"The original idea of the BTC was to create an East-West hub independent of Russia, tying Central Asia to the West," says Bulent Aliriza, a Turkey expert at the Washington-based Center for Strategic and International Studies. "Now that it has finally been built, the irony is that the hub country is more dependent on Russia than before."

After centuries of mutual enmity, Turkey and Russia have taken giant – and largely unnoticed – strides to improve their relations over the past five years. By next year, Russia is set to become Turkey's No. 1 trading partner. Already, Russia supplies 65 percent of Turkey's natural gas.

But Russia is leveraging the Mediterranean nation's dependence to bolster its dominance as an energy supplier, say experts.

"Increasingly, Russia is dictating its terms," says Necdet Pamir, an energy expert with the Eurasia Strategic Research Center in Ankara.

He points to Russian pressure on Turkey to support its bid for stakes in gas-distribution facilities in Istanbul and plans for a massive underground natural-gas storage facility in central Turkey.

More important, Russia has suggested that Turkey sell its gas through Nabucco, a projected 3,000-kilometer (1,865-mile) pipeline the European Union (EU) hopes will deliver gas from Azerbaijan and Iran via Turkey to central Europe by 2011.

"That would be a nice irony, given that the European Union sees Nabucco as an alternative to Russian gas," comments Zeyno Baran, a Caspian expert at Washington's conservative Hudson Institute.

But it's not that Turkey is siding with Russia against the United States and the European Union, she adds. "It's simply that Ankara thinks it can play along with both."

Indeed, Turkey is aiming to bolster its position with the EU, which it hopes to join, at a time when Europe is acutely aware of the need to diversify its energy sources. In January, Russia's state-controlled gas monopoly, Gazprom, cut supplies to Ukraine overnight, affecting numerous European countries.

"We all saw what happened in Ukraine," says Yalim Eralp, a retired diplomat. "By offering an alternative energy corridor, Turkey can both help Europe and increase its own attractiveness in European capitals."

But there is growing evidence that Turkey may have miscalculated its attempt to court both Russia and the West. In April, US Secretary of State Condoleezza Rice warned Turkey against allowing Russia to gain a stake in a gas pipeline that is currently being built between Turkey and Greece and could ultimately stretch as far as Italy.

"It's quite clear that one of the concerns is that there could be a monopoly of supply from one source only, from Russia," she told reporters after a meeting with Greek foreign minister Dora Bakoyannis. The comments, which were accompanied by a request that Turkey and Greece support sanctions against Iran for its nuclear program, raised hackles in Turkey.

"Turkey is trying to diversify its energy sources, but everywhere it looks – Iran, Iraq – it finds problems," says Mr. Pamir. "If we are to wean ourselves off Russia, the West would do better to help us, not criticize us."

One thing Washington could do, he insists, is second Turkish efforts to secure drilling rights in neighboring Iraq. Turkey approached Baghdad 12 years ago with a demand to develop neglected oil and gas fields, but Ankara is still waiting.

And while a recent preliminary energy report issued by the European Commission acknowledged Turkey's "strategic importance for the security of energy supplies to the European Union," analysts say Brussels needs to move fast to ensure Caspian gas breaks a Russian monopoly to reach Europe.

"Turkey sees this week's opening of the BTC as a reason for celebration, rightly," says Mr. Aliriza. "But there needs to be a wider realization that today is the start of the difficulties, not the end."