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8/12/08

Reuters : ANALYSIS-"Fire in neighbour's house" has Turkey on edge

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ANALYSIS-"Fire in neighbour's house" has Turkey on edge

The conflict between Russia and Georgia threatens to undermine NATO member Turkey's ambitions to become an energy hub and could exacerbate misgivings among EU states about expanding the bloc right up to the Caucasus. The fighting over the breakaway region of South Ossetia, which has unsettled oil markets, is another reminder of the strategic importance of Turkey, a country that wants to join the European Union and sits in a volatile region bordering Iran, Syria, Iraq and former Soviet republics. With no energy resources of its own, Turkey has worked hard to become a transit route for Caspian and Central Asian oil and gas exports as Europe tries to reduce its dependence on Russia.

Along with neighbour Georgia, Turkey hosts the Baku-Tbilisi-Ceyhan pipeline, which brings 1 million barrels per day of Azeri oil to Turkey's Mediterranean coast for Western export. It also hopes to host parts of the European Union-backed Nabucco pipeline, expected to be operational in 2013.

Confidence in the pipelines' security was dented last week when Kurdish terrorists claimed responsibility for an explosion that started a fire on the Turkish section of the BTC pipeline. "The East-West energy corridor and Turkey being an energy hub for the West is one of the principal arguments of Turkey in its application for the EU and the need to have a good relationship with Turkey," said Hugh Pope, senior analyst at International Crisis Group. "This conflict casts a shadow over Turkey's foreign policy platform of creating an area of stability."

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